Lucrative Mineral Rights Driving Force to Find Rightful Heirs

- Lucrative Mineral Rights Driving Force to Find Rightful Heirs

Tuesday, August 30, 2011
Knight Ridder/Tribune Business News
by Jeremy Boren, The Pittsburgh Tribune-Review

Imagine winning the lottery without buying a ticket.

It was much like that for Glenn Pore when the Fayette County retiree accepted an energy company's offer to pay him and 10 relatives thousands of dollars to lease mineral rights beneath farmland his ancestors plowed a century ago.

"I was shocked to find out that I had any oil and gas rights," said Pore, 77, of Fairhope. "Remember, I don't own the land."

That doesn't matter.

In Pennsylvania, property owners can sell surface property but retain control of minerals. That includes natural gas trapped in the mile-deep Marcellus shale formation that was out of reach until the technology behind hydraulic fracturing evolved enough to extract it.

Mineral rights stick to the branches of a family tree no matter how many times the surface property sells. The rush to make money from the lucrative gas reserve includes a cadre of genealogists, title experts and landmen the energy companies hire to hunt down living heirs of last century's business-savvy relatives.

"They were old-time farmers, and they owned a bunch of land between Perryopolis and Arnold City," Pore said. "I thought they never left me anything, until this."

Pore's share, passed down from his great-grandmother, amounted to 5 percent, netting him $2,300 for a five-year lease but potentially much more from 14 percent in royalties if the firm drills a productive well. He plans to pass on the lease in his will so it can benefit his two children and six grandchildren.

"People are either really excited or really skeptical," said David Szuhay of Szuhay and Associates, a Robinson-based consultant to oil and gas companies. "When I call, I try to quickly mention great-grandpa Joe Flanagan, and if that name clicks, they're listening."

The larger number of eligible descendants, the smaller their shares.

"We've had cases that have gone down to 1/512th of a share," said Lester Greevy, a Lycoming County lawyer who specializes in estate planning and elder law. "They had a family tree that was eight feet long."

Finding family members spread across five or six generations comes with high stakes.

Relatives can sue an energy company for millions of dollars if it drills a well and takes natural gas without permission from everyone who owns a portion of the mineral rights.

"There is a line of cases in Pennsylvania where if you take somebody's gas, and you don't have a lease with them, they can become a partner in the well," said Harry Klodowski Jr., an attorney in Pine. "They certainly don't want to give them 50 percent of a well, when it could be 18 percent."

A typical title search before a home purchase goes back 60 years, said John Ward, a Greensburg attorney. Oil and gas searches reach back to about 1860, the year Abraham Lincoln was elected president.

Ward said drilling companies want to make deals quickly before regulations or scrutiny threaten profits. He advises clients to ensure firms accept responsibility for tracking down relatives and agree to pay royalties even if someone isn't found.

In 2006, state lawmakers enacted the Dormant Oil and Gas Act to address the problem of missing heirs. It allows the missing person's share to be put into escrow after a rigorous search.

"I like to think of ourselves as genealogists in reverse," said Dave Fittros, owner of Identifax Research Service in Clarksburg, W.Va., who works for energy companies. "Genealogists start with you and go backwards. We start with someone in 1894 and come forward."

Fittros' firm checks cemetery records, marriage certificates, death notices, genealogy websites, deeds and many other records to find family members. In one case, it took 2 1/2 years to find a man with the last name of White who moved as a child from West Virginia to California and was the sole heir to a natural gas well that later generated up to $20,000 a month.

Generally, people work with a genealogist to learn about family roots for religious reasons, medical issues or simply because they're proud of their heritage, said Elissa Powell, owner of Powell Genealogical Services in Marshall.

Searching for heirs who might benefit from an ancestor's mineral rights has created business opportunities for her and her industry as the Marcellus shale boom grows.

"That's the glamorous side of it," Powell said. "I enjoy the thrill of the hunt."

Szuhay of Robinson said energy companies typically go to the trouble of dealing with so many heirs because the cost of routing a mile-long horizontal drilling operation around a property can be high. Those who refuse probably won't get another chance, he said.

He advised family members to sign with large companies capable of drilling wells and generating royalties, rather than taking a high-dollar, up-front payment from an investment firm.

"There is so much work that goes into it before a well can be drilled," said Szuhay, whose 25-year business grew from a one-man operation to 60 employees and four offices thanks to Marcellus shale. "We want families to be happy they signed a lease."

(c)2011 The Pittsburgh Tribune-Review (Greensburg, Pa.). Distributed by MCT Information Services.

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Force Fuels Appoints New CFO

- Force Fuels Appoints New CFO

Tuesday, August 23, 2011
Force Fuels Inc.

Force Fuels has appointed Charles B. Mathews as its Chief Financial Officer as of September 5, 2011.

Mr. Mathews brings more than 18 years of accounting and management experience to the company. He currently serves as the managing principal of Mathews & Mann, LLC, an accounting and business consulting firm in Phoenix, Arizona. Mr. Mathews has extensive experience with both public and private companies. From December 2007 to March 2009, Mr. Mathews was Interim CFO of Education 2020, a virtual education company focused on students in grades 6-12. From March 2004 to November 2007, Mr. Mathews was Executive Vice President and Chief Financial Officer of Quepasa Corporation, a publicly traded leading Hispanic internet portal. Mr. Mathews has extensive experience in helping companies with turn-around situations and corporate restructuring. Mr. Mathews, a Certified Public Accountant, has a B.A. in Business Administration from Alaska Pacific University and an M.B.A. from Arizona State University.

Tom Hemingway, CEO of Force Fuels stated, "We are pleased to have Mr. Mathews join our team. We believe Mr. Mathews will be of great assistance to us as we continue our efforts as we build for the future growth of the company."

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Force Fuels Begins Phase II of Drilling Plan

- Force Fuels Begins Phase II of Drilling Plan

Wednesday, July 13, 2011
Force Fuels Inc.

Force Fuels announced the beginning of Phase II of its drilling plan with Carroll Energy, which includes preparing the reports needed to complete 15 new wells on the properties Force Fuels acquired.

Force Fuels anticipates completing the geological analysis and field study within two weeks so the Company can move forward with the final drilling permit filings. Once the final permits are issued, Force Fuels will schedule the drilling contractor and other service work as needed.

"This is the last Phase to complete prior to drilling the 15 new wells. As I stated in a recent press release, we expect initial production rates from the 15 wells to produce a combined total of approximately 150 Barrels Per Day (BPD), totaling 4,500 barrels per month, in addition to the production from the recently opened previously shut-in wells. We are both proud and excited to enter the production phase," stated Tom Hemingway, President and CEO.

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Kosmos Seeks Force Majeure on Transocean Semisub

- Kosmos Seeks Force Majeure on Transocean Semisub

Thursday, July 07, 2011
Kosmos Energy Ltd.

Kosmos Energy provided an update on the company's drilling of the Cedrela-1 exploration well offshore the Republic of Ghana. The Transocean Marianas semisubmersible drilling rig, under contract to another operator in Ghana, was expected to arrive at the Cedrela-1 well location on the West Cape Three Points Block on or about July 10 to commence drilling Kosmos' Cedrela-1 well near the block's southern boundary. The rig was rendered temporarily inoperable following a reported anchor-handling incident on the Offshore Cape Three Points Block, which is east of the Kosmos-operated West Cape Three Points Block. The incident occurred while preparations were being made to move the rig from the other operator's block to the Cedrela-1 well location.

Kosmos has delivered a force majeure notice to the government of Ghana and the Ghana National Petroleum Corporation due to the delay in the rig's scheduled arrival at the Cedrela-1 well location. As a result, Kosmos has begun a search for a substitute drilling rig and intends to drill the Cedrela-1 well when either the Transocean Marianas or an alternative rig becomes available. The company has the necessary approvals to drill the Cedrela-1 well and anticipates that a rig will be available soon.

Kosmos is the operator of the West Cape Three Points Block in which the company holds a 30.875% interest. An affiliate of Anadarko Petroleum Corporation has a 30.875% interest; an affiliate of Tullow Oil plc has a 22.896% interest; E.O. Group Limited has a 3.5% interest; Sabre Oil & Gas Holdings Limited has a 1.854% interest; and the Ghana National Petroleum Corporation has a 10% carried interest.

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China Says Won't Use Force in South China Sea

- China Says Won't Use Force in South China Sea

Tuesday, June 14, 2011
Dow Jones Newswires
BEIJING

China said Tuesday it wouldn't resort to the use of force in the tense South China Sea, after its neighbors expressed concern about its more assertive maritime posture.

"We will not resort to the use of force or the threat of force," Foreign Ministry spokesman Hong Lei told reporters.

"We hope relevant countries will do more for peace and stability in the region," Hong said.

Vietnam on Monday staged live-fire exercises following recent confrontations at sea with China, which reignited a long-standing dispute over the sovereignty of two potentially oil-rich archipelagos--the Paracels and Spratlys.

Hong insisted Vietnam was to blame for the recent flare-up, sparked by a confrontation between Chinese surveillance vessels and a Vietnamese oil survey ship.

"Some country took unilateral actions to impair China's sovereignty and maritime rights and interests, and released groundless and irresponsible remarks with the attempt to expand and complicate the issue of the South China Seas," Hong said, in a thinly veiled reference to Hanoi. "This is where the problem lies."

He said China was willing to hold direct negotiations with the other nations embroiled in territorial disputes in the South China Sea within the framework of a code of conduct agreed to in 2002.

Tensions have also risen this year between China and the Philippines, another claimant to the Spratlys, which on Monday said it would from now on refer to the South China Sea as the "West Philippine Sea".

Taiwan at the weekend reiterated its claim to the Spratlys, and said missile boats and tanks could be deployed to disputed territory.

Brunei and Malaysia have also staked claims in the area.

Copyright (c) 2011 Dow Jones & Company, Inc.

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State forms Eagle Ford task force

- State forms Eagle Ford task force

Tuesday, May 17, 2011
Houston Chronicle
by Tom Fowler

The Texas Railroad Commission is creating a task force in the Eagle Ford shale region of South Texas to ensure that regulators can keep up with the oil and gas boom there, said one of the three commissioners.

In an interview with the Houston Chronicle, Commissioner David Porter said the state's main drilling regulator wants to avoid repeating problems that arose when gas drilling took off in the Barnett Shale in North Texas in the middle of the last decade.

Breakthroughs in two technologies -- hydraulic fracturing and horizontal drilling -- have allowed drillers to tap economically into prolific shale formations in the Dallas-Fort Worth area and many other parts of the country.

The speed of development in North Texas led to backlashes against drilling in some communities, Porter said.

"There's a perception problem that no one was regulating the oil and gas industry," Porter said. "And it's still out there, that the oil companies are doing whatever they want."

Porter said he believes the Eagle Ford has the potential to be the biggest single economic driver in South Texas' history.

The task force will comprise about a dozen members, including large and small producers, oil field services companies, local elected officials, landowners and environmental groups.

"We want to make sure the lines of communication are clear," Porter said.

But the commission still may face staff shortages because of deep cuts the Legislature is making this session.

During the last session in 2009 the Commission was funded for 704 full-time equivalent positions, which was considered less than full staffing.

Now the staffing is around 625, down because of budget reductions state leaders asked all agencies to make in the past year.

The commission wants funding for 40 to 50 positions above the 704 funded in 2009, but Porter isn't optimistic.

A staffing shortage could lead to delays in issuing permits for Eagle Ford work, he said. Worker shortages already have slowed some permitting and enforcement work.

Historically, the commission has moved workers from other divisions when necessary to keep permits for new wells flowing.

"That's been the highest priority within the commission, to keep everything moving economically," Porter said -- acknowledging the potential for conflict between that function and enforcing safety rules, including ensuring that underground aquifers aren't contaminated by drilling activities.

"It's a fine line we walk at the Railroad Commission, between protecting public health and safety and promoting the industry," Porter said.

The water issues in the Eagle Ford will be even more sensitive than in the Barnett Shale, Porter said, because the area is more arid and the aquifers are deeper than in North Texas, meaning well casing has to run deeper to protect the drinking water.


Copyright (c) 2011, Houston Chronicle

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Sterling Declares Force Majeure at Black Sea Blocks

Sterling Declares Force Majeure at Black Sea Blocks

Thursday, April 28, 2011
Sterling Resources Ltd.

Sterling Resources has declared Force Majeure on its Midia and Pelican Blocks in the Black Sea after the Company has been unable to undertake Petroleum operations for reasons outside of its control.

In early 2011, after extensive and lengthy efforts, the Company finally obtained from the relevant Governmental authorities the environmental and drilling permits necessary for operations on the Midia and Pelican Blocks. The National Agency of Mineral Resources ("NAMR") has given approval to a 2011 work program based on which Sterling is obligated to undertake certain offshore activities which include the drilling of 2 offshore wells, acquiring 1,050 linear kilometers of 2D seismic and undertaking investigations and studies to bring the Ana and Doina discoveries forward for development.

However, in July 2009 the Romanian Parliament passed a law requiring construction permits for certain offshore activities. Sterling has sought clarification of this requirement from relevant authorities, as the activities contemplated under the 2011 work program clearly appear to have aspects that will require a construction permit. It is Sterling's view that, after having received responses from certain relevant governmental authorities, that the authorities are currently unable or unwilling to provide construction permits for offshore oil and gas activities.

The effect of this situation, which the Company views as political in nature, is to render it impossible for the Company to undertake Petroleum Operations at the present time. Sterling has thus issued a notice to NAMR, stating that the total lack of clarity on the applicable procedure and authority for issuance of construction permits constitutes an event of Force Majeure under the Concession Agreement.

Under the terms of the Concession Agreement NAMR must, within 15 days of this notification, either agree with the invocation of Force Majeure, the effect of which would be to extend the duration of the Concession Agreement, or reject the Company's invocation putting the two parties into a dispute resolution procedure which could ultimately be decided in international arbitration.

Mike Azancot, Sterling's Chief Executive Officer, said, "Despite this unfortunate situation we look forward to working with the NAMR and other Romanian authorities to find a resolution that will allow the Company to fulfill its obligations, preserve its rights and ultimately achieve success for the Company and the people of Romania. With a satisfactory resolution achieved, we are hopeful that we can advance our plans to undertake further exploration on these very prospective blocks and bring Ana and Doina to production within 3 years. This will bring significant benefits to Romania in terms of greater energy self-sufficiency, the likely award of construction and oil service contracts to local companies, and encouraging a wide range of companies to explore offshore Romania."

Gas Jobs Await Trained Work Force

Gas Jobs Await Trained Work Force

Tuesday, April 26, 2011
Knight Ridder/Tribune Business News
by Laura Legere, The Times-Tribune, Scranton, Pa.

The list of want ads is long.

Project engineer, gas marketing administrator, landman, heavy equipment operator, compressor technician, business development director, regulatory clerk, petrophysicist.

In late March, the member companies of the Marcellus Shale Coalition advertised hundreds of open positions they want to fill in Pennsylvania or just over the border in New York. Three years into the gas-drilling boom, the job listings testify to the continued need for workers with a variety of skills to propel the growing industry.

Researchers with the Marcellus Shale Education and Training Center estimate shale drilling will require between 3,700 and 15,000 direct jobs in central and northern Pennsylvania by 2013 and an additional 8,100 to 13,500 direct jobs in southwestern Pennsylvania by 2014.

About 75 percent of the jobs will be blue-collar work, said the study's author, James Ladlee, director of Penn State Cooperative Extension in Clinton County. A significant amount, 20 percent, of the jobs can be characterized as general office work -- everything from information technology to receptionists.

"People think about the workers on the drilling rig and they think those are the only jobs out there," he said. "There are a whole bunch of people that are backing them up in a variety of ways to make sure that they are able to do their jobs out in the field."

The Education and Training Center, based at Pennsylvania College of Technology in Williamsport, has continued to adapt to the industry's work force needs, but the basic framework for many of the skills necessary for industry jobs are already available in general skills courses at most technical schools.

For example, many of the skills learned in a diesel mechanics course will apply to the diesel compressors used to push gas from wells into pipelines, Mr. Ladlee said.

Some higher-paying jobs will require more education. Engineers, a real need for the industry, will need four or more years of college education to acquire the necessary skills.

Larry Milliken, director of energy programs at Lackawanna College, said a certified pipeline welder can make more than $100,000 anywhere in the country because they are in such high demand.

"You can't get that skill in a year, but you can develop that skill in four years," he said. "And most of that is paid, on-the-job training after you get a two-year technical degree."

Prospective employees will need to accept a demanding schedule if they want to work in the gas industry, Mr. Milliken said. It is a hard truth he reiterates to the 50 students in the college's natural-gas technology program.

"A lot of people want to work an eight-hour day, go home, not work holidays or weekends and never be interrupted on their personal schedule. That's not the oil and gas business," he said.

"It's a 24-hours-a-day business. It is demanding. You've got to be available when the job calls."

House Panel Votes to Force More Oil Leases in U.S. Waters

House Panel Votes to Force More Oil Leases in U.S. Waters

Thursday, April 14, 2011
Dow Jones Newswires
by Ryan Tracy

A bill requiring the U.S. to open areas off the Virginia coast and in the Gulf of Mexico to oil and gas exploration cleared a key hurdle in the U.S. House Wednesday. The House Natural Resources Committee voted to approve the leasing measure, paving the way for a vote by the full House next month. Earlier Wednesday, the committee also voted to establish a 60-day maximum for the Interior Department to approve or deny offshore drilling permits. If Interior took longer, the permit would be deemed approved.

The bills are part of an effort by House Republicans to support domestic oil and gas production, which they have stepped up in recent months in the face of rising gasoline prices. Democrats have pushed back, saying that Congress should focus on providing incentives for non-traditional energy sources and reducing energy consumption.

All but two Democrats voted against the bills on offshore leasing. The bills' prospects are less certain in the Senate, where Democrats hold a majority.

One proposal approved Wednesday would override a decision last year from the Obama administration not to open the U.S. Atlantic Coast to offshore drilling. It directs the Interior Department to lease areas off the Virginia coast within one year after the bill becomes law.

The bills would also direct Interior to move forward with three new leases in the Gulf, declaring previous environmental reviews of those areas to be sufficient. The administration has delayed its Gulf leasing plans and is conducting new environmental reviews following the Deepwater Horizon disaster nearly one year ago.

"What we're attempting to do is provide some certainty to those who would give us American-made energy," said Rep. Doc Hastings (R., Wash.), chairman of the Natural Resources Committee, and a main sponsor of the bills.

During debate on the proposals, Rep. Rush Holt (D., N.J.) argued that Interior shouldn't move forward with new leases without a new environmental analysis based on lessons learned from the Deepwater Horizon. He said previous reviews had been "very clearly and woefully flawed." Rep. Doug Lamborn (R., Colo.) countered that further environmental reviews would take place as companies apply for permission to explore and drill new wells. Hastings noted that the legislation approved Wednesday requires Interior to conduct a safety review for each drilling permit. Still, Democrats criticized their counterparts for not taking up a bill that would implement recommendations of a presidential commission that studied last year's oil spill. Congress hasn't yet sent the president a bill in response to the disaster, which began with the explosion on a rig leased by BP on April 20.

A proposal to add safety regulations to the House bills, offered Wednesday by Rep. Ed Markey (D., Mass.), was voted down by the Republican majority. "This amendment would micromanage and dictate thorough safety standards" that should be established by the Interior Department, Lamborn said. The majority also rejected a host of proposals from lawmakers in coastal states designed to restrict exploration in the Pacific and Atlantic Oceans.

The legislation would also extend by one year leases impacted by the Obama administration's moratorium on drilling after the Deepwater Horizon disaster. The provision would apply to wells that weren't producing before April 30. It was added to the bill Wednesday in an amendment offered by Rep. Bill Flores (R., Texas).

Lawmakers briefly considered inserting a provision to require oil and natural gas facilities to use only equipment and materials produced in the U.S, but Rep. John Garamendi (D., Calif.) withdrew the amendment after other lawmakers said it was too inflexible. Some Republicans seemed open to the concept, however, and Garamendi said he might offer a different version at a later date.

Also Wednesday, the committee voted to require Interior to open up more resource-rich areas to exploration as part of its next five-year leasing plan. The full Republican-controlled House is expected vote on the bills next month.

Lukoil Declares Force Majeure Offshore Cote d'Ivoire

Lukoil Declares Force Majeure Offshore Cote d'Ivoire

Monday, April 04, 2011

OAO Lukoil

LUKOIL released an official force majeure notification under the PSA terms with regards to the CI-205 offshore geological prospecting project to the Government of Cote d'Ivoire, relevant ministries and Oranto Petroleum and PETROCI Holding partner companies.

LUKOIL Overseas will resume active operations under the CI-205 project as soon as the situation in Cote d'Ivoire subsides.