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Mick Thomas

Division Administrator – Minerals, Public Trust, and Oil & Gas

Secretary to the Oil & Gas Conservation Commission

This update was sent to the Commission on Saturday, October 3.

Current Items:
Application for Permit to Drill
OGCC Regular Meeting
Omnibus Rulemaking
News Article(s) of Interest
Current Prices

Application for Permit to Drill
On September 25, 2020, the Department received a request to reconsider the denial of the Barlow #2-14 application for permit to drill. This appeal will go before the Commission on October 20. The appeal and other information can be found on the Well Permit Applications page.

OGCC Regular Meeting
The November 4th Regular OGCC meeting has been rescheduled to October 20 in order to meet the deadline to present the appeal within 30 days of receiving it. More details on the meeting will be posted on the Commission Meetings page as it is available.

Omnibus Rulemaking
The Department held a public hearing on IDAPA 20, Rules of the Idaho Department of Lands on September 30, 2020. No public comments were received on these rules. The Notice of Adoption of Pending Rule for IDAPA 20.07.02, Rules Governing Conservation on Oil and Natural Gas in the state of Idaho, will be presented to the OGCC at the October 20 meeting.

News Article(s) of Interest
Idaho’s Nascent Natural Gas, Oil Industry Said Interrupted by U.S. Economic Downturn
https://www.naturalgasintel.com/idahos-nascent-natural-gas-oil-industry-said-interrupted-by-u-s-economic-downturn/

BP says oil is on the ropes. (see attached E&E BP oil)

U.S. Drilling sinks to 122 year low with additional decreases possible. (see attached World Oil outlook)

Current Prices
(Colors indicate spot price change since last update. Green indicates increase. Red indicates decrease.)

Utah Sweet Crude	$29.42 bbl.	10/01/20
WTI	$37.01 bbl.	10/02/20
Natural Gas	$2.44 mmbtu.	10/02/20
NGL	$4.80 mmbtu.	9/30/20

On September 25, 2020, Snake River Oil and Gas LLC submitted an appeal to reverse the denial of the application for permit to drill – Barlow #2-14. More information can be found on the Well Permit Applications page.

Mick Thomas

Division Administrator – Minerals, Public Trust, and Oil & Gas

Secretary to the Oil & Gas Conservation Commission

This update was sent to the Commission on Saturday, September 19.

Current Items:
Application for Permit to Drill
Pad Reclamation Update
Field Monitoring System
Monthly Reports
Omnibus Rulemaking
News Article(s) of Interest
Current Prices

Application for Permit to Drill
On September 11, 2020, the Department provided email notice to the operator and appropriate agencies that the application for permit to drill for the proposed Barlow #2-14 well was denied. That notice can be found on the Well Permit Applications page.

Pad Reclamation Update
The Korn and White well reclamation efforts have been delayed due to local residents’ concerns. Snake River Oil and Gas intends to use recycled material from the Korn and White wells in the construction of the Fallon 1-11 well. Because the reclamation efforts have been delayed, the pad construction for the Fallon 1-11 has been delayed as well. To help resolve the issue SROG applied for a Conditional Use Permit (CUP) for the construction of the Fallon 1-11 pad. Pad construction is pending CUP approval.

Field Monitoring System
Snake River Oil and Gas is redesigning the production monitoring and reporting system for the entire field stream. After acquiring the field SROG found issues with the current Supervisory control and data acquisition system (SCADA). SROG has contracted with the Meridian Idaho office of Verus AEC https://www.verusaec.com/ to update and redesign this system. SROG has also been working closely with Bureau of Land Management to ensure federal criteria are met. SROG believes consistent and simplistic well monitoring is the best path forward.
SROG has asked the Department to attend a meeting with the contractor in early October to review the proposed system. SROG plans to have the new system implemented before production is re-started.

Monthly Reports
The July monthly production and transportation reports have been posted on the Monthly & Annual Reports page of the OGCC Website.

Omnibus Rulemaking
At the August 5, 2020 regular OGCC meeting, the Department presented an update on the next step of the omnibus rulemaking for IDAPA 20.07.02, Rules Governing Conservation of Oil and Natural Gas in the State of Idaho (as part of IDAPA 20, Rules of the Idaho Department of Lands). On September 16, 2020, the Notice of Proposed Rulemaking was published in a special edition of the Idaho Administrative Bulletin. No changes have been made to the rule that was approved by the OGCC on February 18, 2020. More information can be found on the OGCC rulemaking webpage for Docket No. 20-0000-2000F.

News Article(s) of Interest
State of Utah provides $5 million dollar grant program for Utah’s oil, gas and mining industries
https://www.ksl.com/article/50018447/funds-quickly-allocated-in-5-million-grant-program-for-utahs-oil-gas-and-mining-industries

Bureau of Land Management scraps Wyoming lease sale due to sage grouse protections

BP says oil demand could be almost dead by 2050
The majors continue the transition to carbon neutral business models. See attached E&E BP oil demand.

Current Prices
(Colors indicate spot price change since last update. Green indicates increase. Red indicates decrease.)

Utah Sweet Crude	$30.86 bbl.	9/17/20
WTI	$40.97 bbl.	9/17/20
Natural Gas	$2.06 mmbtu.	9/16/20
NGL	$4.77 mmbtu.	9/16/20

The July 2020 monthly report is now available. Please see the Monthly and Annual Reports page for more information.

On September 11, 2020, the Department provided email notice to the operator and appropriate agencies that the application for permit to drill for the proposed Barlow #2-14 well was denied. That notice can be found on the Well Permit Applications page.

Mick Thomas

Division Administrator – Minerals, Public Trust, and Oil & Gas

Secretary to the Oil & Gas Conservation Commission

This update was sent to the Commission on Saturday, September 5.

Current Items:
FY2020 4th Quarter Update (April-June 2020)
Application for Permit to Drill
News Article(s) of Interest
Current Prices

FY2020 4th Quarter Update (April-June 2020)
April through June 2020 saw zero production in Idaho. The field remains shut in as a result of low prices, limited infrastructure, and high water disposal costs.
See 2020Q2 Attachment.

Application for Permit to Drill
The Department has completed the review for the Barlow #2-14 application for permit to drill. The Department provided our findings to the AG’s office for review and will respond to the applicant soon. Once the decision is sent to the applicant the response will be posted on the Well Permit Applications page of the OGCC Website.

News Article(s) of Interest
US oil production rebounded in June – driving prices down this summer.
https://www.reuters.com/article/us-usa-oil-output/u-s-oil-production-rose-to-10-4-million-bpd-in-june-eia-idUSKBN25R2AS

Colorado Oil & Gas Commission weighs historic changes to energy rules.
See E&E CO energy rules attachment.

Current Prices

Utah Sweet Crude	$32.21 bbl.	9/4
WTI	$39.42 bbl.	9/4
Natural Gas	$2.19 mmbtu.	9/2
NGL	$5.11 mmbtu.	9/2

On August 13, 2020, a spacing evidentiary hearing and a public witness testimony session were completed for Docket No. CC-2020-OGR-01-001. Videos of both sessions can be found on the Docket No. CC-2020-OGR-01-001 hearing page. On August 27, 2020, a spacing evidentiary hearing and a public witness testimony session were completed for Docket No. CC-2020-OGR-01-002. Videos of both sessions can be found on the Docket No. CC-2020-OGR-01-002 hearing page.

Mick Thomas

Division Administrator – Minerals, Public Trust, and Oil & Gas

Secretary to the Oil & Gas Conservation Commission

This update was sent to the Commission on Friday, August 21.

Current Items:
Class II Application
Application for Permit to Drill
Monthly Reports
News Article(s) of Interest
Current Prices

Class II Application
Snake River Oil and Gas provided additional information regarding their Class II application to the EPA on August 7th. Based on the timeline discussed this summer the EPA could have their review completed by late fall with a comment period this winter. Potential approval in the spring of 2021.

Application for Permit to Drill
The Department is nearly finished with the review of the Barlow 2-14 well application. Recommendations are being drafted and will be discussed next week.
The application can be found on the Commission website at: https://ogcc.idaho.gov/well-permit-applications/

Monthly Reports
In light of a dip in commodity prices and transportation cost production tapered off in FY2020. Below are the produced volumes:

Date	Gas (MCF)	Condensate (BBL)	Oil (BBL)
2019-07	91,728	2,019	0
2019-08	98,488	1,577	0
2019-09	75,874	1,381	0
2019-10	80,229	1,620	0
2019-11	69,801	1,311	0
2019-12	36,158	413	0
2020-01	21,960	266	0
2020-02	14,848	269	0
2020-03	14,203	237	0
2020-04	0	0	0
2020-05	0	0	0
2020-06	0	0	0

 

News Article(s) of Interest
2020 Great American Outdoors Act signed into law by President Trump enhances funding for national parks and monuments. The GAOA was co-sponsored by Idaho Representative Mike Simpson and received praise from the Idaho Conservation League:
https://www.kivitv.com/news/president-trump-signs-great-american-outdoors-act-into-law

The GAOA is funded by offshore oil and gas royalties:
https://www.oedigital.com/news/480709-trump-signs-law-to-fund-public-land-maintenance-with-offshore-oil-and-gas-royalties?utm_source=AOGDigital-ENews-2020-08-05&utm_medium=email&utm_campaign=OEGDigital-ENews

Oregon: Facebook stirs anger, abandons drilling gear on Oregon coast

Current Prices

Utah Sweet Crude	$33.28 bbl.	8/20
WTI	$42.27 bbl.	8/20
Natural Gas	$2.36 mmbtu.	8/20
NGL	$5.18 mmbtu.	8/20

The June 2020 monthly report is now available. Please see the Monthly and Annual Reports page for more information.

Mick Thomas

Division Administrator – Minerals, Public Trust, and Oil & Gas

Secretary to the Oil & Gas Conservation Commission

This update was sent to the Commission on Saturday, August 8.

Commissioners,

Not many updates since we held our quarterly meeting this week. See below.

Current Items:
Application for Permit to Drill
News Article(s) of Interest
Current Prices

Application for Permit to Drill
The comment period for the application for permit to drill submitted by Snake River Oil & Gas, LLC for a proposed Barlow #2-14 well ended this past Wednesday, August 5. The Department is preparing those comments for posting on Monday, August 10th on the Well Permit Applications page. The application is already posted.

News Article(s) of Interest
Office of Inspector General finds royalties paid by Idaho Oil & Gas operator on federal interests are accurate:
https://www.doioig.gov/sites/doioig.gov/files/InvestigativeSummary_SuspectedRoyaltiesFraudONRRID.pdf 
NOTE: I have requested a copy of the full report and will share when it is received.

Increase in US LNG export projected in August
https://www.reuters.com/article/usa-lng-exports/u-s-lng-exports-set-to-rise-for-the-first-time-in-six-months-idUSL1N2F50YS

US LNG sector shows resilience during pandemic
https://www.reuters.com/article/us-united-states-lng-exports-graphic/record-u-s-lng-output-jump-lifts-exports-in-weak-market-idUSKCN24U1WX?il=0

Current Prices

Utah Sweet Crude	$32.65 bbl.	8/06
WTI	$41.53 bbl.	8/07
Natural Gas	$2.25 mcf.	8/07
NGL	$5.00 mmbtu.	8/05