American Oil and Gas Reporter - September 2015 - 152

working on a tiered repatriation tax to
get those dollars home. The real question
is whether the Senate will work with us."

Membership Meeting
At KIOGA's annual membership and
Board of Directors meeting Aug. 2, U.S.
Senator Pat Roberts, R-Ks., told members
he would continue working to preserve
industry tax deductions such as intangible
drilling costs and percentage depletion.
He noted that the Senate Energy Committee had reported legislation to repeal
the crude oil export ban, and emphasized
that Europe and some Asian countries
desperately needed U.S. oil for geopolitical
reasons. "Our European allies are looking
to be weaned off Putin's oil," he commented. "Allowing (crude oil exports)
would give them more political power
against Russia. It also would allow our
allied countries in Asia, such as South
Korea, to stop importing oil from Iran.
"So, it's not only important to our domestic producers that we lift this ban,
but to our allies as well," he maintained.
During the membership meeting, Cross
updated members on several federal and
local issues, including plans by the U.S.
Department of Transportation to revise
the definition of a gas gathering line
subject to federal regulation. "It would
broaden the definition too much," Cross
worried.
Turning to the lesser prairie chicken's
listing under the Endangered Species Act,
Cross said it likely would take several
years before the issue was resolved, al-

LEFT: Andrea Krauss (left) with John O. Farmer Inc. accepts the KIOGA President's
Leadership Award from KIOGA President Edward Cross. RIGHT: Cross bestows Klee
Watchous of Palomino Petroleum with the KIOGA Outstanding Service Award.

though he said the USFWS had acknowledged that conservation efforts seemed
to be working. However, Cross reflected
this likely was the result of increased
rainfall across the bird's range.
The listing is being challenged in the
U.S. District Court for the District of
Columbia in Washington, and Cross commented that whichever side lost definitely
would file an appeal. He said that the industry's legal team was looking for injured
parties, and asked any KIOGA member
that had lost production or access to well
sites because of the listing to give its information to KIOGA's legal team to
strengthen the case.
Cross also addressed Fawcett v. Oil
Producers Inc. of Kansas. In July, the

Pausing after KIOGA's congressional forum, are, from left, KIOGA President Edward P.
Cross; Representative Lynn Jenkins, R-Ks.; Representative Mike Pompeo, R-Ks.; Representative Tim Huelskamp, R-Ks.; and Representative Kevin Yoder, R-Ks. Congressional
efforts to defund the executive branch's regulatory overreach was a prominent topic
during the panel discussion.

152 THE AMERICAN OIL & GAS REPORTER

Kansas Supreme Court ruled the producer did not underpay royalties and rejected the expansive application of the
marketable product rule advanced by
the class action plaintiffs, Cross detailed. He said the court held that when
a producer sold natural gas at the wellhead to a gas gatherer under a "proceeds" lease providing for the payment
of royalties based on sales "at the well,"
the producer had satisfied its duty to
make the gas marketable.

Further Updates
Outgoing KIOGA Chairman Tim
Scheck, owner of Russell, Ks.-based
Scheck Oil Operations, informed attendees
about a mineral rights notification issued
to operators in Russell County. He explained that the Grain Belt Express Clean
Line was permitted to go through the
county, but no leaseholders or operators
had been notified by the electric transmission company whether the line would
cross their property. "The only way we
found out was because some of the leaseholders also own the land," he imparted.
Scheck said Russell County notified
minerals rights owners in such cases,
commenting that there had been at least
one instance where the transmission line
would have interfered with a leaseholder's
current and prospective well sites.
Scheck asked KIOGA members if they
knew whether any other counties were interested in enforcing such a policy.
Jon Callen, chairman of the Kansas Oil
& Gas Resource Fund, advised members
that in light of lower oil prices, Kansas
Strong was maintaining its teacher workshop
program, but had chosen to forego much
of its radio and television advertising.
"We are taking measures to be conservative," he allowed. "For next year,
we want to focus on expanding our workshops. They fill up so fast that we have

American Oil and Gas Reporter - September 2015

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