I Thought You Were a Professional?

Oklahoma Minerals Owners,

Berlin was having coffee at the sale barn this week where she ran across an ol' boy named Keith. Keith asked Berlin what she did when she wasn't raising stockers and she mentioned she's a landman. Keith looked a bit perplexed when he said "a landman? I thought you were a professional, like an accountant or doctor or some sh*t."

Sorry to disappoint Keith, both you and daddy wished Berlin was a doctor or some shi*t too. But even landmen can continue to learn. Below are some items that Berlin thought might be of interest to the readers of The Oil Scout. 

Everything from these pipe fences to producing oil and gas from Oklahoma mineral property is going to become more expensive thanks to the new tariffs.

Saturday Assorted Links

Learning How to Learn: A new course from Coursera created by UC San Diego

Never Split the Difference: Negotiations book (recommended, but you can't use what you learn when negotiating the sale of your Oklahoma oil and gas royalty interests to Berlin)

The Tariff Folly: This tax increase on imported aluminum and steel will punish American workers, invite retaliation that will harm U.S. exports, and make everything that is made out of aluminum and steel more expensive (so...,almost everything). Berlin predicts this will negatively affect the Oklahoma oil and gas industry more than the proposed increase in the gross production tax that the OIPA enjoys complaining about.

More to follow,

Berlin

Smooth Move: Oklahoma Independent Petroleum Association

All,

If Berlin was a betting woman, she would venture to guess that an organization with the words "Independent Petroleum Association" in the title and that represents itself as the unified voice and advocacy group for the Oklahoma oil and natural gas industry might support an independent producer in court proceedings against a municipality. In most cases, the bet would pay out, but not when the Independent Petroleum Association in question is the Oklahoma Independent Petroleum Association (the "OIPA").

In a truly bizarre action, the OIPA, filed a motion with the Canadian County District Court to file brief of amicus curiae to oppose the actions of Citizen Energy II, LLC, a Tulsa based, independent oil and gas operator. There are various Latin terms contained in their motion, but the gist of their argument is that the municipality, Mustang, Oklahoma, was within their right to only conditionally approve the permit to drill. Not only is this weird because the OIPA is supposed to advocate for independent oil and gas producers, but it sponsored legislation to hamstring municipalities' restrictions on drilling operations in 2015 (52. §O.S. 137.1).

Were we supposed to hit send on this fancy letter to the judge?

In a quote from the OIPA's 2018 annual meeting invitation:

After years of oppressive regulation and months of low prices, we’re making the independent oil and natural gas industry great again. Come reflect on our success, plan for the future, expand your knowledge and take it easy at the legendary OIPA Annual Meeting.

Their words, not Berlin's. Who doesn't love greatness? Berlin would like to ask the OIPA how they define success (and legendary), but they would probably just say that it comes before work in the dictionary. Now, Berlin isn't arguing the validity of Mustang's case, she just finds it odd that the advocacy group is anti-advocating. Would it have been a better idea for the OIPA to keep its expensive opinions to itself? Its one thing to whisper to your attorney over a bloody at Cheever's and say "hey, why don't we hang Citizen out to dry?" It's quite another to be openly hostile and support Mustang.

The staff of the OIPA don't appear to be oil and gas folks, but their board appears to be comprised of industry professionals. Berlin is positive that one of the 80 board members own or are employed by companies who will attempt to drill a well inside a municipal boundary in the next year. Did they vote on this action? Weird.

The cat that came in from the cold and now must be nice to the other cats in the office.

It really isn't any surprise the OIPA fumbled this extremely easy to hold (easy_to_hold = nerf) football. Most Southern Oklahoma producers defected last year to form the Oklahoma Energy Producers Alliance after they were disgusted with the OIPA's policies towards extricating Oklahomans from the financial tar bit that is the State's budget. The larger independents left before that to lead the Oklahoma Oil and Gas Association. All groups advocate for crony capitalism and preferential treatment, but only the OIPA advocates for preferential treatment of groups that oppose the companies that compose its membership. 

As 1stSgt Benny once yelled at a young Corporal for agreeing with a Lieutenant, "whose side are ****ing you on" it might be time to ask the crew over at the OIPA the same question, but in an "inside cat" tone of voice.

More to follow,

Berlin

The OIPA who Cried Wolf

All,

This wolf is not impressed with the OIPA's fear mongering

The Oklahoma Independent Petroleum Association claims to represent more than 2,500 individuals and companies from Oklahoma's oil and natural gas industry. It has been in the news quite often lately, usually labeled as the group who is blocking pay raises for teachers. It's Berlin's opinion, that this is the case. While the state government has failed its citizens, there is no doubt the actions of lobbyists have ultimately harmed the taxpayers. There is nothing that smells of crony "capitalism" more than a tax exempt organization lobbying for an already tax advantaged industry to pay even fewer taxes. Berlin despises the tax man as much as anyone else, however Berlin detests special treatment and rent seeking behavior even more. Oil and gas producers will continue to drill and develop oil and gas mineral rights as there are still hydrocarbons to be economically produced despite an increase in the production tax.

The OIPA has continued a negative campaign against anyone who opposes its agenda. It promotes such movements as Oilpatch Proud, as if the patch is more deserving of tax payer money than any other sector. In 2015, the OIPA spent nearly half of its revenues ($1.4m) on salaries. In addition, it spent $835k on "other expenses" which would include the actual lobbying and "educating" of our elected officials. Frightening, but not surprising that the calls from the OIPA for "more money to fight the wind lobby" are really pleas for higher compensation for themselves at the expense of nearly everyone else.

Berlin stands with the King. 

More to follow,

Berlin