American Oil and Gas Reporter - July 2020 - 74

ConventionSection: Kansas Independent Oil & Gas Association
has done a terrific job. Also, KIOGA has
informed members continually about
measures such as the PPP, state and
federal mandates, and every new issue
impacting the industry.
"KIOGA is not an expert about such
things, but we have members who are.
They can help people navigate those subjects and outline the available options,"
Cross says. "We listen to our members
when they tell us what they are looking
for and we keep them updated."
Social distancing has curtailed some
methods of disseminating that information, but technology has opened other
avenues. "Experts were explaining on
video conferences how PPP loans worked,
how to apply for them, and what the
deadlines were," Bleakley describes.
"The PPP knowledge provided a lot of
relief for many of our members to this
point in the pandemic."
U.S. operators surprised the world
with how quickly they began shutting in
production and how much oil they took
off the market, but Bleakley notes that
halting production at some wells is unwise.
Most waterflood projects have continued
operating despite the low oil price, while
other producers have shut in production
to avoid selling at such prices, he says,
with the difference between selling oil in
April versus waiting until May proving
to be close to $10 a barrel.
A large number of operators took
many wells on primary production off
line, and Bleakley says he has heard state
estimates that Kansas' oil output fell
from about 90,000 bbl/d before the pandemic to 50,000 bbl/d at its low point, a
drop that will reduce state and local tax
revenues. He also acknowledges that the
Kansas Corporation Commission is exhibiting some budget austerity. "There

has been a real effort there," Bleakley
credits. "I think there is a hiring freeze in
place that includes leaving retirees' positions unfilled."
One person being replaced at the KCC,
however, is Commissioner Shari Feist-Albrecht, whose term expired in March. On
June 12, Governor Laura Kelly nominated
attorney Andrew French as her replacement,
subject to Senate confirmation. KIOGA
notes French works at the Smithyman &
Zaquora law firm in Overland Park, Ks.,
where he practices energy and public
utility law and has experience in complex
litigation regarding utility rates and services.
Speaking in mid-June, Cross noted
the Senate's Confirmation Oversight Committee was about to hold a hearing on the
appointment. "I hope that will give us a
feel for his stances on oil and gas issues,"
Cross relates. "Full Senate approval cannot
take place until January 2021, though."
A Boiling Point
KIOGA has expended a great deal of
effort to mitigate electric rates but has
made little progress. The association notes
that electricity is the highest operating
cost for most producers and that KIOGA
Electric Committee Chairman Adam Beren
has appealed to the Kansas Electric Cooperatives (KEC) group for rate relief
only to be told that operators' only recourse
is to appeal directly to their local cooperatives (AOGR, April 2020, pg. 74).
According to Cross, the co-ops' responses to individual companies' appeals
have not been encouraging. "They send a
form letter declining the request, saying
they cannot give a specialized rate because
everyone else will wonder why they do
not get special consideration," he describes.
"There was little relief to Kansas operators from that," Bleakley says, "and

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74 THE AMERICAN OIL & GAS REPORTER

the issue may be nearing a boiling point."
During the initial weeks and months
of the pandemic, he notes, numerous
state and federal agencies demonstrated
flexibility in various ways affecting lease
requirements, regulatory obligations and
even tax filing deadlines. However, he
contrasts, the electric co-ops have shown
little empathy, and cites the example of
how, if an operator who seeks to cut
electricity costs requests that an electric
meter be pulled from a lease, then all
back charges must be paid before that
lease can have its power restored.
Progress may come once the state completes the second half of its rate study in
time for the 2021 Kansas Legislature,
Cross assesses. "We hope that will help
clarify the matter," he states. "Kansas rates
are higher than those of surrounding states,
so the problem goes beyond oil and gas."
Annual Convention
Cautious, cautious optimism also may
be a good way to describe how KIOGA is
approaching its 2020 Annual Convention,
scheduled for Aug. 16-18. Although the
pandemic's sudden onset this spring forced
KIOGA to cancel its midyear meeting, the
group hopes better timing and appropriate
precautions will allow the annual meeting
to take place. Nevertheless, the association
says its convention committee is preparing
a "Plan B" for a virtual convention.
Considering the summer resurgence
in COVID-19 cases, KIOGA acknowledges uncertainties for its annual meeting.
"We are going forward as planned for
now, though with all the necessary safety
precautions and social distancing," Cross
reports. "We also will have a virtual
option for some of the speakers, so people
who are unable to attend will be able to
hear those presentations."
Bleakley indicates KIOGA expects attendance to fall short of its normal numbers,
and says the association is striving to
keep costs down. "We did not have the
midyear, which is one of our education
programs," he notes. "The annual meeting
is our biggest membership event, so we
are trying to rework our plans to fit the
current situation. KIOGA is in a transitional
period as we try to determine what postpandemic life is going to look like in our
organization and in the Kansas oil and
gas industry, but we know we will have
to keep our budget trim."
According to Cross, the trade show
will play an especially prominent role in
the 2020 convention. He notes that both
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