okay good morning everyone it's 10
o'clock we'd like to welcome you to the
Virginia gas and O board meeting for
today it's uh
February 20th
2024 and I'm Bill Harris I'll be
chairing today's meeting I'd like the
other board members who are present to
introduce themselves uh starting with
Miss Quin to my
for Mary quillin
reat public member I'm Bill Harris a
public member Gus Jansen public member
uh Willie coch Virginia
energy
okay and I'd like to indicate that we do
have a quorum here present but we do
have some other members who are not in
attendance and I do have their remote uh
attendance sheet so uh what I would like
to do is to read the information from
that uh we do have Bruce Prather Bruce
are you on the line yes I am okay uh
Bruce uh desires to participate remotely
due to his uh principal residence
located uh being more than 60
miles uh and he is present on the line
uh he is indicated to me that he is
unable to attend today because of the
remote uh location
um is
there uh any objection from the present
committee that um uh he not participate
is are we okay with
that a motion to approve uh yes I'll
give you a motion to approve okay we do
have a is there a second fine all in
favor say yes yes yes yes okay we do
have approve that remote participation
and so we will allow that thank you Mr
prayther for that form we also have
Donnie Ratliff who is um who has uh
applied also for remote
participation and Donnie are you with us
today think he was going to call
in and I he's trying
to m
Donnie usually at this time of the year
is participating in the
Virginia
assembly maybe he got the wrong number
like I
did just make sure okay we we'll give
him a minute or two to
get
for
should we go ahead and go forward and
then have him working on
it approve him if he gets in make
thetion to approve Mr R if he joins us
okay uh I don't know if that's premature
but
um okay what once we do have a quorum to
go forward and um we did
ratify
uh we did have a motion that was
successfully passed to allow Mr
Prather
something we need
to oh okay okay we're checking on that
okay folks I think we do have uh a
successful motion that we can allow Mr
um Prather to participate uh and we did
determine that his
um uh remote attendance resolution was
properly uh sent in and approved so uh I
think we're okay with that so we'll just
go ahead and proceed from
that and when we hear from Mr Ratliff
we'll go ahead and approve that as well
but we do have a quorum to proceed
forward so we'll go ahead and proceed uh
the board will receive public comments
did we have anyone
listed for public
comment okay hearing none and seeing
none we'll proceed on uh the First Bank
and Trust Company escrow agent for the
Virginia Gas and Oil board will appear
uh to address the board uh for the
quarterly slend of year report we'd
invite those people to come forward with
that
report good morning can everyone hear me
uh yes
yes okay
good this is our fourth quarter report
this is also our end of the year
report we'll start out on page three
this is a summary for the fourth quarter
and end of the year we started out
fourth quarter October the 1st with
5,183
n217 we had deposits of 2,1
18525 we earned interest of almost the
same amount $
24,750
122 deducted fees for the quarter 5, $1
18419 we paid out distributions of
58,4
7490 leaving us an ending balance at
1231 of
5,170
228 in
2023 on page four we had processed eight
treasury dockets totaling
$2,970
.78 23 normal dockets of
$166,400
58 we'd issued over 400 checks this year
and they ranged from 7 cents to 28,0
70770 239 of those checks were less than
$100 and 36 of those checks were less
than
$1
starting at page
five these are all of our outstanding
checks as of the end of the year I know
this is a very long list so bear with
me it goes through page
22 so at the end of the year we had a
little over $882,000 outstanding
checks and if if you'll notice on page
22 the last few were issued in November
of
23 so those are not terribly old but
these are everything that's issued as of
the end of the
year starting
on page
23 this will be what is a sheated for
2024 if we've had no communication with
these people in The Last 5
Years and that list is kind of long too
and I know that each gas company is
working on their
list the dollar amount is not a lot it's
only $
7,311 but it's a lot of people with
small dollar
checks on page 30 this is our balance
sheet so this list each individual
account number and what is in it who it
belongs
to the beginning balance the deposits
that were received this is just for the
month of
December the money market it received
for the month any cedar interest fees
deducted any distributions from those
accounts if we transferred anything to
the no W9
spreadsheet um audit costs Corrections
and their ending market value Broken Out
by each individual account
starting on page 38 this is the list of
no
W9 individual names Broken Out by their
docket
number and this is a long list as
well it has 433 lines on it not
necessarily 433 names but 433 individual
lines that these people just need to
submit their W9 to the gas company and
the gas company send it to me and we can
pay these people
directly so there's a little over
$41,000 held in this account for the
people that need to submit their
W9 if if I might ask a question it are
the reasons here the same as they were
before people get a letter from the
government and they or from an agency
and they just don't pick it up thinking
it's
a I mean I don't know if we know why
they don't pick them up but they get
something with a return receipt and they
decide not to go to the post office
because they're afraid it's a tax lean
or
something it very well could
be okay thank you the gas company sends
out the gas company sends those out
return receipts so um a lot of these
were
prior um intervest dockets there's a few
on there for cnx Pocahontas gas and
those are because the person has passed
away
generally when the docket was issued
they were they returned their
receipt and then they passed away so
we're waiting on The Heirs to submit
their W NES yeah okay I'm sorry I didn't
mean to interrupt go ahead go ahead fine
um so a little over 41,000 sitting in
that account and it's still earning
interest as well and that's broken out
by each individual
person page 50 is a total of the
distributions the income that we have
received the distributions that we've
paid out broken down by each year since
First Bank and Trust became the escrow
agent page
51 is the investment of the funds as of
the December
31st we had three million in ic money
market account and then $2 million in
CDs that are coming due this
July and the CDs ranged from five and a
quarter to
5.3% up to 5.5 was the highest that we
received in interest on
those rate
comparisons um this has broken down by
one month three months six months one
year and two
years
based on what it was at the last vgb
board meeting that we were at and
current rates this was current as of
January the
4th so those are a little outdated
numbers
now and then again the last page is the
CD rates and these were as of the
January meeting that was cancelled so
these numbers are a little outdated now
too so we had at the time three month
CDs that ranged from 4.85 to
5.1 all the way up to 2year CDs that
range from 4.1 to
4.65 does anybody have any
questions any questions from board
members any interest in increasing the
amount of CDs that you
have these will come doe in
J and they're still $3 million
cash okay
uh let let me do indicate Let's see we
have another
meeting Let's see we do we have another
report let's see July is when
when uh well I'm trying to think I just
saw Donnie there I'm thinking we'd
probably need to get him on board uh
let's do that I don't mean to interrupt
but in case Donny has a question about
the rates let's go ahead and get him
admitted then we're all um legal if you
will so let let me just interrupt you
just for a quick second and get Donnie
on um we did indicate earlier that we do
have an approved um I'm sorry we do have
the form from him for the uh
requesting uh approval for the remote
attendance uh do we have a motion and we
did indicate that he was attending the
um General Assembly meetings in Richmond
do I have a motion relative to his
uh resolution approving
that okay fine second second okay all in
favor say
yes no fine yeah that has been approved
and again uh we do ratify his uh
determination uh for uh meeting that
requirement so uh Donnie welcome uh
thank you we we'll have another board
presentation in May will we not yeah
that that was my question then I thought
well since you were there I'd uh go
ahead and and get you on board yeah that
was my question we would have another
meeting before um a the July uh I guess
um report from the
bank that's what I'm thinking it would
be this is February so March April May
yeah and then then she can update the CD
rates uh so we can see what we're
dealing with but would that be an
appropriate
time um
sure okay we may actually have two
meetings
before these CDs
mature so let's see I would come back
for first quarter in April assuming that
you would have the meeting then and then
second quarter would be the end of June
report so it would fall around the time
these CDs are coming due okay well then
in that case is there something we
should be doing would you just say 3
million
that's that's the money
maret and want to look at the balance
what the rates are how they
compare because they fluctuated over the
last several months with the CDs and the
money market and a little B
better
so might want to consider
that so your suggesting I'm just wonder
should we keep things as they are for
the next mons be that would be my
opinion but that's just my
opinion I think so we we'll have at
least one more meeting maybe two and
then she can update the uh the yields on
the percentages and we can see what
we've got but so the suggestion is leave
things as they are for right now until
we get an update the next um certainly
before July yes but they don't mature
till July of
24 good
yeah yeah you can compare those to see
what the growth is on the CDs and the
money market like I said you know right
now Market
is yeah
yeah
that's fine any any other
discussion anything
else no as usual she's done an
outstanding job yeah we do certainly
thank you very much for this
report and uh we look forward to uh our
continued working with you
all uh anything else from the
board okay again thank you very much
thank you all have a good day thank you
you
too okay and one thing I forgot to
mention if you would mute mute your
phones I meant to mention that at the
outset uh if you would turn off your
phones or mute we are recording the
meeting and that does
uh the recording does pick that up so
those of you who are present or online I
know it's kind of hard to do if you're
speaking but anyway if you would okay
we'll move into the main items then uh
we have a petition from keyrock energy
LLC for creation of a sealed do drilling
unit and pooling uh unit uh and pooling
the unit is honey Camp number one docket
number is BG o
23121 9-
4279 we'd ask all parties who wish to
speak to this unit or speak to this
petition to please uh come forward yes
sir Freddy appearing on behalf of Ky
Rock Energy and I also have Morgan Pate
from KY Rock appearing with me okay F
anyone
else okay there appear to be no others
so you may go ahead and
proceed Mr P can you please think your
name uh for the board please Morgan you
need he needs to be sworn in okay I'm Mr
P P you swear and affirm that your
testimony is the truth the whole truth
and nothing but the truth yes ma'am
yes you can proceed Mr P can you please
state your name for the board please
Morgan p and how are you employed I'm
geologist for kyrock energy all right
and is kyrock energy LLC authorized to
conduct business in the Commonwealth at
Virginia yes and there's Bond on file
with this department is that correct yes
and you're familiar with the application
for honey Camp number one yes sir and
this is for a CED methane well is that
correct yes and this unit is located in
the North a CO bed gas field yes and how
many acres does it contain
794 approximately and can you explain to
the board what kyck plans to do if this
application is granted uh we will drill
into the abandoned s Gob area of deep
mine 26 at the honey Camp location for
uh gas and flare that for environmental
credits and so you'll be drilling
directly into the seam is that correct
uh yes the mind out seam and what theme
is that the lower Banner all right and
have you obtained leases for a portion
of this unit yes and are those leases
from the intervest entities yes sir and
how is intervest informed of this
proing uh certified mael return receipt
requested and best your knowledge has
the notice with that Associated
documentation been filed with this board
yes and as a result of those leases what
percentage uh does KY Rock currently
have under lease
55.4 and so that would mean that there's
4446 uh% left Unleased is that correct
yes do you know what percentage of those
owners are unknown
2.39% and how were these unknown
Unleased owners informed ofing notice by
publication in the Theon star and any
other Unleased owners they were also
provided notice by order of publication
yes what percentage of the unit are you
seeking to pull today 100% And are you
requesting that the board pull the
interest of all the parties listed on
exhibit B of this application yes and
are you requesting the board establish a
procedure all parties listed on exhibit
B3 have the right to one of the three
options listed on the application yes
and what lease terms would you be
offering uh these Unleased owners those
identical to the lease terms uh we
secured within our vest and and what is
that is that 12 and a half% royalty
yes and what is the proposed depth of
this well about 530 ft and can you give
the board an idea of the estimated
reserves about 350 mmcf over 10 years
and you're familiar with the projected
well cost in this petition as well yes
and did you participate in the
preparation of the AF file with this
application yes and what is the
estimated dry hole cost approximately
$180,000 and are you asking the board to
create a sealed Gob drilling unit and
and to pull that unit
yes and a portion of that pooling would
be voluntary those would be the
intervest leases yes and a portion
involuntary
correct and are you asking the board to
name kyrock energy as the operator for
this unit yes and in your opinion if the
board were to Grant the application
today would it prevent waste promote
conservation and protect corative rights
yes that'd be all the questions that I'd
have Mr chair thank you um any questions
from the
board so if I'm clear on this you have a
um lease with intervest for this acreage
yes sir you're also pooling that
yes sir that's that's the uh that's what
when you pay them directly into your
lease terms with them do you need to
pull them well we have on the previous
leases it's uh it's up to the discretion
of the board how you wish us to proceed
sure if we actually pull people who are
leased well the staff weigh in on that
do we one of the problems that we have
if you'll remember is that we have
entities not in this particular well but
if we have entities uh that have entered
into a lease with intervest we had to
pull them even though a lease existed
okay so they may have other leases yes
sir that's what you're saying that's
different situation there then so you've
but you've identified those people also
yes
sir
okay these are the the people that are
listed there are no leases with us right
so can you just maybe describe your
leasing efforts a little bit what you
did from the due d deci side to lease
any of these Unleased parties you mean
any parties outside of intervest correct
um we've identified them via title and
surface ownership and I have spoken
with I want to say 10 or so of the
interested parties and we have discussed
Leasing and for those that I have spoken
with uh they have and we have internally
opted to simply pull them um and part of
the reason for that with at least two of
the gentlemen I spoke with was that if
we had an existing lease with them it
would also imply that we had the rights
to drill on their
surface and they would rather be pulled
without those rights as opposed to
Bing okay but where you are drilling you
do have the rights to drill be on that
surface correct surface so there's no no
issue
there I have not spoken with all the
people inside this
unit
okay we're assuming everyone's been
notified did you do that by certified
mail to for the yes sir on the the
addresses that are provided in the
application they were all sent notice
via certifi receive any input back from
those people about want to lease prior
to this hearing the the the I the ones
the phone calls that I received Mr
Janson we answered their questions and I
referred them to Mr PA and and told them
if they were interested in leasing they
need to speak to
him
one other question on the uh the cost of
the well on your
AF uh my understanding that you use a
skid mounted production unit that you
place on this which actually does the
methane
destruction that cost is not included in
a for that facility I can tell so you're
not passing that cost on to anyone who
did want to participate in the well that
cost be passed on to those people just
see the cost of actually really the side
right and I I think the reason for that
being uh as of now we don't know what we
will encounter when we drill into the
mine it could be flooded or it could
have gas sure and also some of the
equipment that we would use on this site
might have already been purchased um it
might come from an existing site that's
shutting down sure no problem just want
to make sure what it was clear whether
that was the cost that we passed on to
be participating no this is just the
person that partipate just to get into
the
mind thank
you other questions from board
members okay anything else no sir
okay uh the board operates on a
motion motion to
approve second and uh any further
discussion okay all in favor uh the
motion is for approval all in favor of
approval of this petition say yes or I
guess we ought to P the board let's do
that qu yes Mrs harat yes Mr Harris yes
Mr Janson yes Mr Cochran yes Mr
Prather
yes Mr
Iain okay fine uh that uh petition is
passed or ex accept it so move on okay
the next item which is number five on
your list petition from KY Rock Energy
LC for creation of a seal Gob drilling
unit and pooling the unit is kyrock m-
26-1 the docket number is VG o
24-2
220
d428 we'd all ask all parties who wish
to speak to this petition to please come
forward Freddy mulls on behalf of Ky
Rock Energy and I'll be calling Morgan p
as my witness in this matter Mr chair
okay uh any others no sir okay uh I
think the uh those are the only two so
you may go ahead and proceed and I think
he's previously been sworn yes okay all
right we'll show that go ahead all right
Mr P can you can you please state your
name and how you're employed uh Morgan
pton geologist for kyrock energy and is
kyrock energy LLC authorized to conduct
business in the Commonwealth of Virginia
yes and is there a bond on file with
this department concerning KY Rock
Energy yes and you're familiar with the
application for uh unit kyrock m-26 D1
yes sir and this is for a CED methane
well correct yes and this unit is
located in the Norah CED gas field
yes and can you tell the board how many
acres it contains approximately 816
acres and can you tell the board what
kyrock plans to do if this petition is
granted uh we will drill into an
abandoned Gob area in deep mine 26 uh
for the purpose of flaring gas to
generate uh environmental credits offset
credits and this seam that you'll be
drilling into can you tell the board
what seene that is it's the lower Banner
all right and has KY Rock obtained
leases for a portion of this unit yes
and who are those with uh intervest and
how is intervest informed of this
proceeding certified
mail and has KY Rock provided notice of
that certified mailing uh to this board
yes what about those that were Unleased
how are they provided noce uh notice in
Dickson star along with certified
mailings yes all right and what
percentage of the unit does KY Rock
Energy currently have under leas as
result of the intervest leases
79.7% all right and so the percentage
that KY Rock doesn't have under leas is
at 20.23% yes and do you know the
percentage of the unknown owners about
37 all right and what percentage of the
unit are you seeking to pull today 100%
And are you requesting that the board
pull the interest of all the parties
listed on exhibit B yes and are you
requesting that the board establish a
procedure all parties listed uh on
exhibit B3 have the right to participate
through one of the enumerated options
yes and what lease terms are you
offering these Unleased owners those
identical to intervest 12 a half%
royalty all right and what is the
proposed depth of this well about 370 ft
do you have an estimate on the reserves
about 340 mmcf over the first 10 years
and you're familiar with the uh
projected well cost is that correct yes
sir and did you uh help prepare the AF
file with this application yes and
what's what's your estimated drrive hole
cost approximately
155,000 and are you asking the board to
create a sealed Gob drilling unit and to
pull that unit yes and a portion of that
pooling would be voluntary yes sir those
would be the intervest leases yes and a
portion involuntary yes and are you
asking the board to name KY rock as the
operator for this unit yes and in your
opinion if the board were to Grant your
application today would it prevent waste
promote conservation and protect
correlative rights yes sir that would be
our evidence Mr
chair okay uh question from board
members just one question I probably
should have asked it on the the first
one these you her the uh my
understanding that this board had asked
KCK to proceed with the an application
and permitting for the existing project
that they have on the Deep mine 26 area
yes sir you give us an update on that on
that status of that skipped over doing
some new ones without doing that one if
if we could could we defer that until
after we have questions of the board on
how to proceed uh with that matter if we
could defer that until after this
particular application sure that's no
problem okay any other
questions oh one other one I noticed
here on um your exhibit B and your B3
track 20 you identify the Brinks company
but you don't have a designation that
they are the gas owner are they are they
the gas owner or is there some conflict
going on on that one all the other all
the other tracks identified with the gas
owner they are the gas owner Mr Janson
is that something we need to have
corrected on there Sarah that are the
gas
owner yes I work with Mr M on that
excuse me where was that on page 20 and
again track
three so big
one get the
PTF here oh the Brinks okay yeah not it
doesn't say yeah okay
okay
okay they would
be okay any further questions from the
board anything else no sir okay uh the
order entertain a motion relative to
this
petition second okay uh
any further discussion before we
vote okay the motion is for approval uh
uh would you care to P the board M yes
Mrs Sarat yes Mr Harris yes Mr Jameson
yes Mr Cochran yes Mr
prer yes and Mr atler
Iain okay that uh motion passed so that
petition has been
approved thank you thank you Mr chance I
understand you have questions about the
the previous existing we as and we have
talked to to staff as far as uh the
petition that we would bring in front of
the board it's going to be an unusual
petition and I'll give you an example uh
there's actually not going to be a well
boring uh Mr P can describe uh more
accurately than I can of the the
physical nature but it's essentially a
pipe coming out of the coming out
understand it's the old Air sh okay with
the mind it's the actual mine slope yeah
and so they put two PVC pipes in the
slope one on the the slope bottom one on
the top and then they stack concrete
blocks in front of it and then push dirt
off we are pulling gas from the the PVC
pipe that's coming out of the top of the
Mind slope okay um so there's there's no
AF involved um with this so it will be a
little bit unusual we'll also have to
take care with uh our facts uh because
of the there was correspondence between
tck and and Mr Lambert who was a former
um uh director here uh and we'll we'll
try to set all that out uh in the in our
petition uh we understand there's not
going to be a meeting in March but it's
our hope that we have that submitted uh
for your uh consideration in April we
have all of the title finished and all
of the mapping finished
um we were asked a few questions um for
example uh how would we address the back
payment of royalty um and so we're
trying to get all that squared away
prior to putting that in front of you
okay no
problem this is a c a CBM whe right it
it won't actually be a whale per se but
it it yes ma'am it's go
May yes
ma'am and we just want to make sure
because of the unusual nature of it
there may be a lot of back and forth
with with staff we want to make sure
that we bring the board what you want
for
consideration just to follow up with
that I I know we've done several of
these applications over the past couple
years have have K rock or maybe the op
writers had any thoughts about possibly
exploring field rules to go with these
so that every one of these doesn't have
to be bought in front of the board these
unit establishments but isn't they
consider doing that they save you all
some time and effort that that's
certainly something uh I don't know how
their lawyer feels about that but the
I'm sure KY Rock would appreciate the
opportunity to do that yeah that's
something I think you work with the
staff to come up with something there if
it's feasible to do that yes have a lot
more of these I don't know what the
long-term plans for this are but it
seems like this is a a lot of what we're
dealing with here
now thank you we appreciate
that okay that that's all we have we
appreciate the board's consideration
today right thank you thank you for
attendance okay move on to the next
petition the petition is from Pocahontas
gas LLC 41 the dispersement of escro
funds uh here deposited with board's
escrow agent and that's attri able to
track 1e uh as depicted upon the NX
table and two authorization to begin
paying royalties directly to the parties
uh to the royalty sprit agreement uh
listed in the petition the unit is
w35 docket number vob
98-02 I'm sorry
0324
d627 D13
we'd ask all parties who wish to speak
to this petition to please come
forward Mark Schwarz and Kelly
Barry okay anyone
else don't think
so you swear and affirm that your
testimony is the truth the whole truth
and nothing but the truth I
do okay I think there are no others
present so welcome to both of you all
and you go ahead uh you may proceed good
morning morning Kelly would you state
your name for the record please Kelly
Barry and who do you work for Pocahontas
gas LLC okay and are you appearing on
behalf of Pocahontas Gest this morning
yes and I've got to get rid my cat here
hold on a
second there you go Bud he will turn up
from time to time he's very interested
in what's going on
um this is a uh petition for
dispersement correct that's correct and
have we previously had dispersements
from uh from this unit yes we have okay
and we'll get into that eventually uh
the um the the the two requests here are
to authorize a dispersement and then in
some instances to authorized direct
payment correct yes okay uh the the unit
involved is what what unit
w35 okay and if we look at your petition
um you're indicating that we have uh a
royalty split
agreement uh between uh hurt Maguire now
Maguire hurt I guess they've changed
changed their name um and the Burks
correct that's correct and the prior
owner was uh Daisy Burke and apparently
the Joel and Brenda have uh stepped into
her position yes okay uh if we go to
page let see
here go to page six of your application
before we do that what did you do to
tell people uh who would be interested
in the out come of this hearing today
that we were going to have a hearing uh
we mailed a copy of the petition by
certified mail with returned receipt
requested uh now let's turn to page uh
six of the application or petition uh we
have as usual we've got some tables uh
or a table uh to to give instructions to
the escrow agent in in terms of payment
and in this particular instance we have
a table one and a table too correct
that's correct and why is that uh the
property was deed uh from Daisy Burke to
Joel and Brenda Burke in 2020 so all
funds held in escrow prior to that
conveyance are now due to the erors of
Daisy
Burke and the first table is at a pay an
exact dollar amount correct that's
correct okay and in that table uh you
have at the far right hand column for
each of the the individuals or companies
listed you've set forth a specific
dollar amount yes okay and then if we
turn to table uh
two uh this is a percentage table
correct that's correct and this pertains
to the owner subsequent to uh
um the uh well this pertains to the new
owners Joel and and
Brenda yes that's correct and they're
split with the Maguire her airs yes and
this is the split is what percentage it
is a 5050 split okay and then at the end
of table two uh you've got some
adjustment comments there and are those
uh the instructions that should be given
to the escrow agent in the event that
this uh application is approved
yes and could you summarize that for the
for the record uh these
instructions the these instructions
detail that the escrow agent is to
deduct the amounts paid to the prior
owners which would be The Heirs of Daisy
Burke from the current amounts due to
the current owners Joel and Brenda Burke
to arrive at the current amounts due
okay and and then the there's also an
adjustment that needs to be made with
regard to the m herd errs correct yes
okay and once those adjustments have
been made then the uh the table two
percentage can be paid yes and have you
indicated or what are the wells that
contributed to the cesco
account uh w35 a w35 B and W
35d uh then you provided and at e which
is uh the a description of the interest
that will remain in escrow in the event
that this petition is
approved that's correct and we can tell
from the first bit of the or the heading
on this exhibit that we're talking about
uh five uh uh long wall
panels yes okay and then if we go to uh
page 28 I think of the the PDF uh we've
got uh a a summary of take that back
back here have you provided an exhibit
double e uh to to uh to demonstrate what
the payments would be going forward uh
the direct payments going would be going
forward in the event this application is
approved yes and that exhibit double e
starts at uh page 12 of the PDF and
continues on for a number of pages until
we get to page
29 uh which is our exhibit is that
correct that's correct okay and in in uh
preparing for your application here uh
did you go
back and retrieve all of the checks that
the operator has paid over the years for
pertaining to this unit and then compare
those checks to the records of the
escrow agent to determine whether or not
they matched up yes and is exhibit J
your report in that regard yes it is and
the first page of exhibit J which is 20
Page 29 at the PDF has uh two entries
identified in um in
yellow yes and and that indicates that
check was cut for
okay then as we go through these Pages
we find at this at page 30 another entry
uh sort of in the middle of that page uh
in yellow which indicates another issue
with regard to a deposit that was made
and no corresponding check that you
could find yes and then then we've got
at the bottom of page 30 we've got some
stuff in Darker brackets correct yes and
when you do that what does that indicate
that indicates that the amounts appear
to not align with each other but when
you add them together uh the the
deposits match each other on both sides
okay and that would be true as we go
forward with in the next couple of uh
docket items as well if if you've got
something that looks odd but you can you
can reconcile you outline it in a darker
black uh border
yes and as we get to the end here uh
have you provided some
calculations uh that you've made to to
try and compare or for the purpose of
comparing your internal uh calculations
with regard to the potential balance to
the October 2023 First Bank and Trust
balance yes and you indicate uh youve
got your first entry is you the total
that that you that the operator has
deposited yes and you account for
dispersements quite a number of them uh
projected or interest and fees that you
were able to capture from the bank's
records and you come up with a total and
then you when you compare that total to
the October balance is there a
difference there is and what's the
difference uh First Bank and Trust shows
$215 42 more than our deposits can
account for okay uh and I believe uh Mr
Mr chairman that that's all we have uh
with regard to this uh
petition okay thank you uh questions
from board
members okay
uh I guess the board and you have
nothing else Mr Sports is that it
correct we're we're that's that's what
we wanted to present okay the board
operates on a
motion second okay fine uh any further
discussion before we take a vote okay uh
would you pull the board for that motion
yes Mrs S yes Mr Harris yes Mr Janson
yes Mr Cochran yes Mr
Prather yes and Mr
Ras
yes fine that uh petition has uh passed
so
uh we'll move on to the next item and
that's item number
seven uh on your list uh petition from
Pocahontas gas LLC for one the
dispersement of escro of escro funds
here to for deposited with the board's
escrow
agent uh I don't know if I need well to
portions of track 2 a 2 b 2 c 2 d 2 f to
G to H to I to J 2 k to L portions well
several listed and we'll give to the
docket number here in a second uh two to
authorization to begin paying royalties
three to dismiss uh or the dismissal of
co-owners uh and uh the docket number or
and that's in unit
r49 the donet number is VG o
09-
317
d2487
d03 we' ask all parties who wish to
speak to this petition to please come
forward Mark Schwarz and Kelly Barry
fine uh and the record will show there
are no others so you may proceed thank
you uh I think the record should also
indicate that Kelly has previously been
sworn yes okay the record will refle
like that keelly could you state your
name again for the record please Kelly
Berry and who do you work for Pocahontas
scas LLC and are you here on behalf of
Pocahontas gas today who is the
petitioner on this application yes okay
and in this one we actually have all
three U of the things that we normally
ask for we're requesting a dispersement
from escrow which will have some tables
to talk about uh we're we're talking
about uh requesting that the folks
that that some folks be authorized to
receive direct payments and lastly we're
going to talk about a dismissal of Some
Coal interests correct that's correct
okay um the
uh in in part uh we are talking about a
dispersements based on a split agreement
is that
correct yes that is correct okay and
then we've got a long list of names of
people that we are requesting
dispersements to under the uh gas and
oil act because they're coal owner I'm
sorry they're gas owners correct that's
correct and then number three is a
dismissal of some well a dismissal of
hurt Maguire or Maguire Herz because
they've had two names uh Co interest to
the extent that they do not have split
agreements correct that is correct
so uh this is one of those situations
where the the co-owners were able to
negotiate uh split agreements with some
of the gas owners but not all of them
and to the extent they have agreements
we've got a 5050 split agreement and
grire receives a payment to the extent
they did not reach agreements um they
are being dismissed from the unit and
the gas owners are being paid under the
ACT that's a summary of where we're
headed correct yes
what did you do to notify all of these
folks that we would be having a hearing
today uh we mailed a copy of the
petition by certified mail with return
receipt
requested okay and in and have you also
in the past uh mailed uh a notice to the
coowner uh hurt Maguire Maguire hurt
that they would that you were requesting
that they produce evidence of
agreements uh within 45 days of the
notice to preserve their potential claim
yes and I think the very last item uh on
this uh uh on this
application is uh well there's actually
at page 81 of the application you've got
a signed receipt for a letter that you
sent to hert Maguire notifying them of
their obligation to produce evidence yes
and then you've got a a copy of the form
letter that that was sent to them at as
the last page
82 other than the uh the split
agreements that they produced which will
be addressed in the tables uh all of the
other folks the other gas claimants uh
have not entered into split agreements
is that correct yes okay
uh got a table
one at uh page nine of the application
right yes and we have a table uh two in
the next page but let's let's talk about
uh table one first uh this is an exact
dollar payment that is correct and
there're two folks that would be
receiving the payments yes and you
provided their names and addresses yes
and then on the very right hand column
the the dollar amounts there to receive
yes and why why do we have a exact
dollar amount uh table one here these
folks are prior owners who have who who
deed their interests in May of
2013 okay so this squares the accounts
with them and this should be paid before
we move to table two to pay on a
percentage basis yes okay moving to
table two which is quite lengthy correct
it is okay uh but in table two uh this
is a a um a a list of all of the gas
claimants that we previously talked
about uh and and you're giving their
names and their addresses uh and the
percentage uh that the uh
that of their interest they're they're
not subject to a split show you're
showing 100% for each one of these folks
as a directive to the uh escalation to
to cut these checks yes okay and if we
go be going to the very end here of
table
two see what page that is page number 44
okay at page
44 um you've got some adjustment
comments uh which we've already which
we've already talked about uh and you've
identified the wells that contributed to
this escr account correct
yes you have provided at page it's 40
starting at page 46 and exhibit e and
that's a list so the uh interests that
would remain in
escrow in the event that this petition
is
approved yes and then eventually we'll
get to an exhibit double e I find
that looks like that starts at page
58 and exhibit dou e would be an updated
uh exhibit that shows the the going
forward
payments uh that could be made directly
uh by the operator in the event again
that this petition is approved yes okay
and then at page starting at page 76 we
have an exhibit
J yes and once
again did you go back and identify all
of the checks that the operator shows it
paid uh pertaining to uh royalties and
production from uh unit r49 over the
years and also then compared those
checks or looked for corresponding
deposits from the escrow agent records
compared them to see if there were any
differences is that a fair statement of
what you did yes and once again at the
first very first page we've got uh a a
difference where there's uh deposits two
deposits it and and no corresponding
check that's correct okay as we work our
way
through the pages here uh there aren't
very many that's the only discrepancy
until we get to a dis sort of a
discussion at the very end where you've
done your balance calculation correct
yes okay uh there's a
a a comment uh at total deposited uh
could you could you read that into the
record and then tell us what what
happened there sure um this unit was
repoed and prior to repoing of this unit
escro payments to First Bank and chust
were placed on hold um once the repoing
was completed and the updated acreages
were taken into account um we made a
deposit which is not reflected on the
exhibit J because it was prepared prior
to the deposit being made but a deposit
was made in November of 2023 of $1
13,720 77 to fully fund the escrow
account prior to a dispersement taking
place okay and uh when when was the unit
reped was it the fall of uh it was in in
uh I believe it was in late
2022 okay
okay and and the when you C when you
take obviously the the deposit uh
adjustment interest and fees you come up
with a total your calculation you've got
again an October 2023 uh First Bank and
Trust
balance uh and when you compare those
Amounts is there a
difference uh yes First Bank and Trust
balance is $89 19 more than than our
accounting of checks and you've
testified that the deposit was made in
November and the bank comparison that
you did was in October so that's why the
that deposit does not appear here that's
correct and we've already talked about
the uh notice to the call owner uh and
and the return of re seat card and so
forth which is the last uh of the
exhibits here um um I think Mr chairman
that that's all I have with regard to
this
unit okay questions from members of the
board does this peti petition allow this
account to be closed or it still be
additional things that will be held in
escrow oh we have additional owners who
have not yet submitted w9s and and so
there will be an additional need for
escra okay thank
you
any further
questions okay the board operates on a
motion
temporary
second okay um we have a motion a second
Miss Gilman would you pull the board
please Mrs quill yes Mrs yes Mr Harris
yes Mr Jansen yes Mr cofin yes Mr pther
yes and Mr
r i
abstain okay that motion passed um and
so that petition has been
approved okay we'll move on to the next
item it's a petition from Pocahontas gas
LLC for refund of escrow payments here
to for deposited with the board's escro
agent uh reimburse overpayment of funds
deposited with the board's escrow agent
and era attributable to units uh I'm
sorry to unit
vp8 uh
SG3 to Pocahontas gas LLC docket number
is VG o
06-03
21-15
98-04 we'd ask all parties who wish to
speak to this petition to please come
forward Mark Schwarz and Kelly Barry F
uh I believe those are the only two so
you may proceed thank you uh Kelly would
you state your name for us Kelly Barry
uh have you been previously
sworn yes and that happened today
correct yes yes okay uh who do you work
for Pocahontas gas
LLC and are you here on behalf of
Pocahontas gas the petitioner in in
support to support this miscellaneous
petition yes
uh what did you do to notify folks we
were going to have a hearing
today uh there was a not notice of in
publication okay okay uh and this is
kind of a
u I'll let you tell the board why and
then we'll go to the map and the and the
document why why are we here on this uh
on this petition today uh we are here on
this petition today uh because
we have discovered that funds have been
deposited into the escrow account for
vp8
SG3 that were attributable to Wells that
are not located within the boundary of
bp8
SG3 and therefore we are asking that
those funds be reimbursed to Pocahontas
scas LLC to be distributed to the
appropriate owners in those individual
Frack
units okay uh and and to to to sort of
see what you're talking about if if if
you all can look at the map at um at
page two of the
application you will see a portion of a
long wall mine uh you've got some at the
very top of the map you've got some an
indication of a long Mall panel that was
mine then you've got some entries and
and some mining in uh in the in the
first full panels uh below the North
Boundary and around the the mining uh
the Mind map you can see a blue
line uh and that blue line is that in
fact the boundary of the sealed go unit
um that uh yes that is on the south the
South uh side of the vp8 SG3 boundary
yes okay and so it's clear and then have
you you put circles around five Wells
correct
yes and those Wells are in two
uh Frack
units yes that would be Z10 and
z11 are those oak wood units yes okay
and the intent here is to retrieve the
funds from the sealed Gob unit and then
divide them appropriately between Z10
owners and z11 owners and those two
Frack units and apportion the the
production and revenue
accordingly that's correct okay and then
we've got quite a collection of
calculations because we had to go back
in time uh to to re recalculate all of
this or reallocate the production and
the and the dollar amounts so starting
at page three you provided us with a uh
essentially the
recalculation uh and to simplify matters
if we go to the very last
page um of this application I think it's
page 20 PDF page 20 you have uh provided
a summary of the funds paid in error
which is a summary of the preceding
Pages correct that's correct okay and
you have uh in fact uh
summarized the the the the subtotals in
effect for each of the five Wells
yes uh and and you report a total to be
refunded of what amount $
32,40
73 then you will as as we've indicated
uh real ate to
uh unit Z10 and unit
z11
yes I think that's all we have on this
uh Mr
chairman excuse me uh questions from
board
members just so that um makes sure
understand what I'm looking at here on
your
summary
one page let get back down to the
summary I I can explain ahead of that
also I'm not sure what your question
will be but to just explain why we have
it broken up into three uh groups of
sales dates that is because we had three
different accounting systems during the
time period when these Wells paid into
the seel go unit in error so we had to
retrieve the the funds for each well
from three different accounting
systems okay that's that's part of my
question the sales date the June 20 June
206 2012 none of those dates show up in
the the prior summaries of all the the
dates it looks like it starts in
201 well there I submitted I submitted
three separate um there should be a
separate summary for there should be
separate detail for each time period I
should say I submitted separate Det for
each time period it looks like there
could be the 2006 time period is missing
from what was uploaded yeah that's what
I don't see I don't see anything other
than it starts at
2012 that's what was confusing to me
yeah okay we think we have we have all
the pages you you'll confirm that you
have all the detail that goes with
that and then the other question just
this is semantics probably at the end
since this is something that traces back
to
2006 it looks like I guess there's been
royalty or I guess these there's been
interest paid on all these payments over
the years but you're not requesting
those you didn't try to figure out what
that interest might have been
and no that forward to pay out to
whoever the new owners are so now we are
strictly requesting that the the royalty
paid into the account be paid back
out so any interest will just stay with
this account and be distributed going
forward to those people yes
okay and if I understand that you you
have owners who have not been paid on
these five individual Wells since going
back to 2006 or have you been paying
them separately all this time and that's
how you caught the error yes okay so
there there's really no they're not
going these people aren't going to get a
a
check you've already been you've you've
reconciled those people already the way
I understand it they they would yes they
will receive They will receive their
portion each proportionate share of
these funds yes okay so they will get
from this reimbursement okay yes yes
okay well I'm I'm a little confused then
so there won't be people
that excuse me were you going to say
something else yes um we these these
Wells were
disconnected so to speak from the the
division of interest for the SE Gob unit
back in May
um of
2023 and set up to pay on their own
individual Frack
dois so we already have the
ownership and allocations in place to be
able to distribute These funds once they
are
returned so in essence you're saying
that the the revenue since well starting
in May of 2023 and going for forward
that revenue is not reported here but
that will also be paid to the owners in
c10 and C11 along with a $
32,40 73 or in addition to
yes I I guess my concern is and and I'm
I'm just trying to wander through the
numbers we haven't incorrectly paid
people that we're asking money back from
I haven't said that correctly but you
know what I'm saying in other
we don't have $32,000 worth of payments
we've given to people that should not
have received that
32,000 we do we do yes and those funds
are being recouped
internally from the sealed Gob unit
owners
um uh I'm still a little confused so if
I receed if I received $10,000 since 20
six then you're asking me to return that
$10,000 is that
right no um no you'll Rec it going
forward on future payments is that the
way works okay okay okay
okay okay I I have it down that is
correct
yep okay thank you yeah I was just
wondering how that is done yes
uh any other questions or discussions Mr
Schwarz anything else or Miss
Barry uh just just to sort of summarize
that that because the the sealed Gob
unit continues to produce we have an
opportunity to recoup those funds over
you know future payments Mr chairman uh
sometimes it happens that the you know
that the unit where the mistake was was
made um is not continuing to produce or
doesn't produce sufficient funds to
enable us to do that and and in those
instances which have occurred in the
past you know uh the operator just winds
up not recovering those funds you know
you don't sue people for that you
know yeah that that that was why I had
the question that but I understand now
since it's still producing then uh going
forward you can uh make those
adjustments or whatever yeah correct
okay uh any questions or further
questions from the board just one I mean
we have over the years we have seen
these not
intentional little hiccups um and we
have never gone back
to those people that were paid and
shouldn't have
been as long as the
well still producing is that
correct that's my
belief as far as I'm aware yes
okay yeah I can't remember a case where
we've gone back and said hey you need to
pay us $10,000 back but that's that was
my question if I mean I I mean I I can
remember because we had had some follows
over many years that not
often but
never and that I can In My Memory have
we ever um not made that right yeah for
those for those folks because I mean
people get
$10,000 I mean they you and over a
period of time and this goes back
to yeah 2012 is that right well 2006 it
looks like yeah 2006 right yeah yeah
that's what that's why I had a question
again you
know well the one thing to bear in mind
too that you know we have a sealed Gove
unit here which is a huge unit and this
$32,000 is going to have a a very small
effect on the overall history of that
unit okay this isn't like we had one
well and we've got a
$32,000 difference we've got you know
sealed Gob unit uh with pretty
significant uh uh production of revenues
over over the years so that the the the
order of magnitude is not enormous I
mean it's $32,000 I mean that's a lot of
money but in in the context it's not uh
uh it's not going to have a huge effect
on any
individual and and I think that's the
message that we
want the public to know right yes given
given the size of this unit as a a well
over 3,000 acre unit unit and this still
still leaves well over $400,000 in the
escro account as well to be paid
out that's why you know just we just
want this on the record that not gonna
be penalized because that's the first
thing the public going jump on is oh
these people they made a mistake and now
they're foreclosing on their property or
whatever you know that's not gonna
happen trth to it but you don't have
people love to
bad
mouth the indry we
do
unfortunately okay well that was one of
the reason I asked a question I thought
going forward what's what's going to
happen if
somebody were to be overpaid that you
know how that how that works out yes
okay but I think you all have
sufficiently answer that okay um thank
you thank you all okay anything further
we do need to take an action on this um
to approve okay we have a motion for
approval and we do have a second um Miss
Gilman if you will pull the board
please Mrs quillin yes Mrs S yes Mr
Harris yes Mr Janssen yes Mr Cochran yes
Mr
Prather yes Mr ATA yes okay that
petition has been
approved okay uh so we move on the
petition from intervest operating LLC
for P for pooling unit is VC
5383 72 I believe I've called that right
docket number is VG o
23-8 I'm sorry
0815 D
4269 we'd ask all parties who wish to
speak to this item to please come
forward it be Tim Scott Larry Rees and
jimy Aris for intervest operating
LLC
okay thank you um Mr Scott and anyone
else F the record will show that uh
there's no one else so Mr Scott you may
proceed uh Miss Gilmer you going to
swear these fellas
in yes
sir Mr
Mr do you swear and affirm their
testimony is the truth the whole truth
and nothing but the truth yes
yes
oh I guess you can proceed thank you Mr
Harris Mr re please set your name by
whom you're employed your job
description uh Larry Reeves employed by
anest operating as a landman and you're
familiar with this application that
correct yes and did you also participate
in preparation of this application yes I
did and this unit is located in the nor
kette gas field it is and how many acres
does it contain uh 58.7 s acres and uh
with regard to the um the lease position
for this particular unit uh intervest is
a mineral owner in this unit is that
correct that is correct okay uh are
there any parties responded listed on
exhibit B3 that we're going to dismiss
today no and um were those parties
listed on exhibit B3 how was notice
provided to those parties of this
hearing
today uh they were notified by certified
maale return receip
requested and uh the dick and
publication and Dickinson star so do we
have any unknown owners in this unit uh
yes and uh um are you continuing to try
to locate those individuals we are okay
so your efforts are ongoing is that
right that is correct and have you
provided proof of mailing and
publication to the board uh yes we have
and we do not have an escrow requirement
of this unit is that right uh no no
escrow okay uh intervest is authorized
to conduct business in the Commonwealth
is that correct correct and there's a
blanket Bond on file is that also
correct yes and if you were able to
reach an agreement with the parties
listed on EX exhibit B3 what terms would
you offer for a lease uh for this
particular unit uh $5 per year per acre
for a 5year paid up lease at 1 18 Roy
and you believe this is sufficient
compensation for the lease in this area
yes it is and what percentage of the gas
estate does intervest either have under
lease or by
ownership uh
98.87% and what percentage of the uh
unit are you seeking to pool today 1.
n1250 %. okay are you also requesting
that intervest be named the operator for
this unit yes sir and if the board
grants our application today um where
should um any elections be made
regarding uh this particular order uh to
be sent to intervest operating
LLC 408 West Main Street Abington
Virginia
24210 attention Kevin Miller vice
president land thank you and should this
be the uh address for all Communications
uh with intervest regarding this any
pooling order entered by the board uh
yes okay that's all I have for Mr
Reeves uh questions from members of the
board uh just one question the yes this
application was it original was it
previously submitted to this board in
September of 2023 was it withdrawn at
that time or I don't know what happened
to it back then I think we had requested
the docket number at that time to put it
into the hearing and we just hadn't got
it
submitted
so the numbers reflect that it would
have been a September docket
hearing okay so what you don't think it
was on the docket back in September
before and was drawn or I want to make
sure weren't hearing something we'
already heard
no no I like I said I think we just had
requested the docket number then um in
hopes to get it submitted and and just
happen at that time
okay okay thank you you may proceed
thank you Mr Harris um Mr haris please
set your name by whom you're your job
description James SS inter best
operating and landman and uh are you
familiar with the proposed depth of this
well yes and what would that be it's uh
2,100 ft and are you also familiar with
the estimated reserves for this unit yes
and what would those be 642 mmcf and you
participate in the preparation of the AF
that we submitted with our application
is that right that's correct so you're
familiar with the well cost yes and
what's the estimated dry hole cost for
this unit it is
202 $
22,24 and the estimated completed well
cost
$582,500
and um if the board grants are
application today would it prevent waste
promote conservation and protect
correlative rights yes it would okay
that's all I have for Mr
SS questions from members of the
board
oh okay hearing none you may continue
that's all I have Mr Harris okay any
anything further from the
board uh the board will entertain a
motion relative to this
item okay M Gil would you PLL the board
please Mrs quillin yes Mrs S yes Mr
Harris yes Mr Jansen yes Mr Cochran yes
Mr
pther yes Mr Ratt
Iain okay the petition is uh approved
thank you Mr chairman thank you and I
believe that's it for our agenda for the
uh
petitions so thanks to everyone there
okay the let me make just a couple of
notes
okay the next item the board will
receive an update uh of board and
division activities from the
staff we have not had any petitions
submitted for the March hearing so we
won't have a March
meeting and I also want to mention that
um the October board date is now going
to be on October the 22nd instead of
October the 15th
we had another meeting um out of
town that we have to attend R and I and
we're just going to move that to October
the 2 if that's okay with
everybody yeah
but fine with me I don't know about
others but yeah that's that's fine y
that's all I
have
okay um we'll move on item number 11 the
board will review the November 2023
minutes for
approval any discussion about the
minutes otherwise we'll entertain a
motion relative to those
minutes motion to
approve second okay uh any discussion
about
that all in favor say
yes opposed uh
no fine those minutes are
approved okay uh item number 12 uh the
board will have a close session meeting
as directed by the Assistant Attorney
General Jackson Brown uh Mr Brown do you
need to uh initiate that discussion or
how do we need to do we need to have a
motion to go into Clos session I believe
we do don't we yes we do need a motion
to go into the Clos session okay I'll
entertain that
motion I make the motion that we uh move
to a closed
session oh okay someone is hang
on uh sorry I was trying to speak but I
was muted we have a resolution to go
into close session so if we could just
make sure that we read through that
resolution and adopt that resolution
okay
and uh and Eric this is Sarah when do
you want me to switch under to the to
the close session meeting only after
we've adopted that resolution
okay okay now I don't have that
resolution I think uh a month ago we
were
so okay Jackson do you have a copy of
the resolution yeah I have a copy do you
want me to circulate it to Sarah real
quick sure and you can just read it out
loud that will that will also be
sufficient I'll just read I'll read it
out loud
so the Virginia Gas and Oil board hereby
resolves to discuss the following
subject matter in Clos session this
meeting will be a consultation on
changes to a draft regulation regarding
the appropriate procedure when the board
is required to put funds for an
unidentifiable or unlocatable party in
escrow this subject matter is Exempted
from open meeting requirements under the
following provisions of the Virginia
freedom of of Information Act which
would be Virginia code
2.2-cu with legal council employed or
attained by a public body regarding
specific legal matters requiring the
provision of legal advice by such
councel okay Mr Jansen I know you made a
motion earlier that we go into Clos
session would you modify your motion to
adopt that resolution to go into close
session yes I'll modify that to accept
the resolution that we just read into
the record fine is that appropriate
folks with the appropriate
second do we have an appropriate
second fine we do all in favor of that
say yes opposed yes no by so uh the
board will move into a closed session
and I think at this time do we close out
the uh standard board
meeting and the record boing thereof and
then we enter okay so the standard board
meeting is now
closed