Ky/Tenn Report

Volume 18, Number 6 July 2011

OIL & GAS BOARD MEETING DELAYED UNTIL AUGUST - The Tennessee Oil & Gas Board hearing, scheduled for July 6th, to consider new and revised Oil & Gas Regulations has been delayed and tentatively scheduled for August. The reason the hearing is to be delayed and rescheduled was because it was noted that a fiscal note had to be attached to any new regulation. This calls for the staff to determine what it will cost the industry and what it will cost to enforce these new regulations.

TOGA PLANS TO SUBMIT COST ESTIMATES TO STATE - While the Tennessee Water Pollution Control staff is charged with the responsibility for estimating how much it will cost the industry to comply with these new proposed regulations, TOGA will submit its own estimates to the state as well. TOGA has submitted its objections to several of the new regs in writing and is prepared to present objections at the hearing. "Several of these new regulations will cost thousands of dollars to be spent unnecessarily by producers," said TOGA president Jim Washburn. "We have submitted our objections to many of these proposed new regulations and will show the Commissioner just how costly many of these new regs will be, if passed."

TDEC COMMISSIONER, TOGA, ENVIRONMENTALS TO MEET - A meeting between the new Deputy TDEC Commissioner for Environment, Shari Meghreblian, TOGA representatives, as well as environmental groups, is being planned for later this month. The purpose of this meeting is to begin developing proposed regulations to provide necessary oversight for the use of hydrological fracturing as a method of modern natural gas extraction in Tennessee. The goal of these regulations, to be presented to the Oil & Gas Board for consideration, shall be to protect Tennessee's groundwater quality and drinking water supplies, to protect the collative rights of the land and mineral owners, and all for the development, protection and management of the resources of natural gas deposits. We retained a top lobbying firm to represent us in the legislature. The meeting is the first step in complying with a resolution passed by the Tennessee General Assembly, urging TOGA, TDEC and environmental groups, represented by the League of Women Voters, Conservation Voters and the Sierra Club to work together to develop these new regs.

ILLINOIS FRACING BILL FAILS - Legislation proposed by a faith-based environmental group requiring disclosure of chemicals used in hydraulic fracturing failed to make it out of committee before adjournment of the Illinois General Assembly. The Illinois Oil & Gas Association negotiated with the lead proponents of the legislation and many of the industry's suggestions were accepted. The original bill would have required a permit prior to any hydraulic fracing activities and would have provided little or no protection for trade secrets.

WIND POWER TEAM PUSHES TOUGH FRACING REGS - After suffering through a terrible year because of low natural gas prices, the wind power industry is supporting environmental groups trying to regulate fracing across the nation. At a recent Wind Energy panel discussion, David Loomis, director of Illinois State University's Center for Renewable Energy said, "If we regulate that (hydraulic fracturing) to a significant degree it will restrict the supply and raise the price of natural gas. If we say no, this isn't a concern and if the EPA says no, we are going to give our blessing to this…natural gas process can stay low for a fairly long time." Abundant and affordable natural gas is understandably seen as a threat the promoters of wind power.

MILLER ALASKA WELL DOING 250 BOD - Miller Energy Resources, (NYSE:MILL) has announced that it has successfully completed the rework of the RU-7 well from its offshore Redoubt Shoals field. The rework consisted of replacing the electrical submersible pump and wellbore optimization that resulted in 250 BOD production. Miller has also commissioned the construction of a $17 million rig for future drilling in its Redoubt Shoals field and from its Osprey Offshore platform.

UNIVERSAL WELL SPECIALISTS ELECTED TO TOGA BOARD - Neil Boyer of Universal Well Service, has been elected to the Tennessee Oil & Gas Association Board, filling the position vacated by Doug Roberts, Atlas Energy, Inc., who was relocated to Pennsylvania.

2O MEMBERS DROPPED FROM TOGA - Some 20-plus of our 2010 members failed to pay their 2011 dues and were dropped from the TOGA membership rolls and will not appear in the new 2011-2012 TOGA directory being printed. To those 20, please don't stay dropped out; we need you more than ever. The 'green' crowd is coming after us for fracing and we know that if we can't frac, we might was well not drill. If you are unsure if you have renewed, please call Teresa at 615-371-6127 to check on the status of your membership.

TENNESSEE JUNE PERMITS: Anderson County: Knox Energy, LLC, Map 0406 General Partnership AH-1034, 3785'; AH-1012, 3779', Fort Mountain, #AH-102, AH-1038, 3842', Duncan Flats/ Coffee County: Hickory Creek Energy, LLC, C. Steven Cunningham #3, 999', Hillsboro Quadrangle/ Fentress County: Richard A Rader, Billy Campav #2, 1200', Riverton/ Pickett County: X-Pro Drilling, Inc., Garrett Stockton #1, 2000' Byrdstown; Overton County: Overton Oil & Gas, Inc., Myrna Bowyer Revocable #10, 2,000', Alpine; Ralph Smith #3, 2,500', Alpine; National Energy Development, Richard Love #NED #15, 2,500' Livingston; Ed Wright #4, 2500', Alpine; John H. Barksdale, Bernie Ruble Unit #1, 2000, Alpine; Donald Wells, Windle LLC #5, 2500', Livingston; Hornet Oil & Gas Corp, Ricky Melton #1A, #1, 2500', Livingston; Rick-Rod Oil Co Inc., Hershell & George Wilson #2, 2000', Crawford; Chris Farmer, Bernie Ruble #14, 2500', Alpine; V&T Oil & Gas, Inc., Lenard Ledbetter #1, 2500', Crawford /

SOUTHERN KENTUCKY JUNE PERMITS: Clinton County: Steve Burchett Oil Co, Dalton, Michael, # Burchlew 68, Knox Gp; Sell, Josh, # Amtex-Dr12, Knox Gp; Freeman, Orville, # Burchlew 71, Knox Gp; Smith, Greg, # Burchlew 72, Knox Gp; Crudewell Drilling, Inc, Stienmann, Sumner, # 4, 5, 6, Knox Gp/ Cumberland County: S W O Drilling, Wisdom, Larry & Delores, # 10, Stones River; Riverside Oil & Gas, Inc, Pharis, A B Heirs C/O Pharis, Alvin, # 1, Knox Gp; Hart Oil, LLC, Chowning, Chat, # 18, 19, Knox Gp; Rich, Joe, York, Geneva, # 1y, Knox Gp/ Letcher County: EQT Production Company, EQT Production Company, # 570911, 569420, 571617, 571622, Cleveland Mbr, Ohio Sh; # 70912, 569421, 571618, 571621, Huron Mbr, Ohio Sh/ Monroe County: CPI, LLC, Page, Corey, # 1, Knox Gp/ Russell County: Unakent Oil, LLC, Coomer, Ronald, # 2, Sunnybrook; Petrotech Resources Corp, Green, Hazel, # Gp1-Hgreen1, Knox Gp; Holt, David, # Gp1-Dholt1, Knox Gp; York, Elvis, # Gp1-Eyork1, Knox Gp

The Ky/Tenn Report is published monthly and distributed at no cost to oil and gas operators in Tennessee and Southern Kentucky. It is owned and operated by W.D. Goodwin, Inc., The editor is Bill Goodwin, e-mail: tmdbill@aol.com it is the official publication of the Tennessee Oil & Gas Association, 750 Old Hickory Blvd, #150-2, Brentwood, TN, 37027. Phone 615.371.6137, Fax 615.599-1806. Web site: www.tennoil.com.

KY/TENN REPORT
750 OLD HICKORY BLVD, #150-2
BRENTWOOD, TN 37027