American Oil and Gas Reporter - May 2015 - 33

"Jobs are being lost and families are being impacted negatively, so the last thing
the House leadership wants to do is compound the issue," he describes. "We have
shown legislators how the governor's
proposal is likely to tax production at a
price higher than Ohio producers actually receive. Appalachian Basin producers
are paid an average $1 an Mcf less than
other areas of the country. However, the
governor's proposal has the tax commissioner determine the price, which probably means a Henry Hub price. Arriving at
a number other than what operators actually are paid is persuasive in our discussions with lawmakers, as is the fact that
the proposal does not allow for any cost
recovery or post-production costs."
Although OOGA is encouraged by Sub
HB 64, Bennett says the association has no
intention of letting down its guard for the
remainder of the 131st General Assembly.
"This issue has not been laid to rest," he intones. "We continue to educate senators
about the severance tax proposal day in and
day out to help them fully understand the
negative impacts it would have."
Ultimately, he says, that education
will emphasize the same points that helped
shape the House proposal. "When we
show legislators the issues with determining the price, and the lack of cost recovery and post-production costs-unlike every
other state-they start to realize this proposal is not best for Ohio," Bennett relates.
"We commend the House leadership for
saying this is the absolute worst time to impose a severance tax on an industry that is
struggling. We hope the Senate follows the
House's lead and keeps that severance tax
proposal out of the budget."

the upper chamber also includes advocacy for HB 8, which changes state laws covering the impact and timing of unitization,
and which the House passed 98-0 in midMarch (AOGR, April 2015, pg. 50).
HB 8 requires the Ohio Division of Oil
and Gas Resources Management to hold
a hearing on a unitization application
signed by 65 percent of mineral owners
with 45 days, and to issue an order
within 30 days of the hearing. It also
transfers authority to issue pooling orders
for resources controlled by the state to
DOGRM from the state Oil and Gas
Leasing Commission.

"In a lot of instances our members are
left in limbo, wondering whether a unitization order will be approved," he describes. "We would like to see landowners able to monetize more of their acreage,
so we are looking to put in some timelines,
and also include some language in the
code explicitly stating that all state
acreage-outside state parks-may be unitized. We hope to see the Senate move on
that, because it is one of the House's priority bills."
Bennett said in late April that HB 8 was
awaiting a hearing in the Senate Natural
Resources Committee.
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Unitization Bill
Bennett indicates OOGA's outreach to

Flowtex Energy Starts
Projects With Partners

AUSTIN, TX.-Flowtex Energy reports it has entered into two partnerships
that will focus on drilling new wells in
Central Oklahoma and Southeast Texas.
Flowtex Energy explains that its first
partnership is with Emerald Natural Resources Group Inc., an Edmond, Ok.based company with which Flowtex Energy will focus on developing the proven
oil fields of Central Oklahoma.
The second partnership is with HEXT
Operating Ltd., a Buna, Tx.-based company that Flowtex Energy describes as
"hands on" for all aspects of oil production. The companies will focus on developing oil in the Spindletop area of Southeast Texas, Flowtex reports.
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MAY 2015 33

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American Oil and Gas Reporter - May 2015

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