Annually, all First Purchasers, as outlined in Ohio Revised Code 1510, will received assessment forms in January of each year. If you are a new natural gas and crude oil producer or First Purchaser, please contact OOGEEP directly for a First Purchaser packet or questions regarding obligations under ORC 1510.
FIRST PURCHASER INFORMATION AND OBLIGATIONS UNDER OHIO REVISED CODE 1510
The Ohio Oil and Gas Energy Education Program (OOGEEP) is a non-profit industry funded education, safety and public outreach program. OOGEEP was created by the industry under Ohio Revised Code 1510 in 1997, and was approved by Ohio producers in a statewide Referendum, and ordered effective by April 1, 1998, by the Ohio Department of Natural Resources, Division of Oil and Gas Resources Management’s Technical Advisory Committee. OOGEEP is not a state agency nor does it utilize any tax payer dollars to fund the industry’s programs. Any changes made to OOGEEP must be further approved by Ohio Revised Code 1510 and/or through another Producer Referendum.
DEFINITION OF A FIRST PURCHASER
Ohio Revised Code 1510.01 (A) defines a “First Purchaser” as:
(1) With regard to crude oil and condensate, the person to whom title first is transferred beyond the gathering tank or tanks, beyond the facility from which the crude oil was produced, or both.
(2) With regard to natural gas, the person to whom title first is transferred beyond the inlet side of the measurement station from which natural gas was first produced.
ROLE OF FIRST PURCHASER
The First Purchaser’s role under Ohio Revised Code 1510, and the Ohio Oil and Gas Energy Education Program, is to collect the assessment made on the production of crude oil and natural gas in the state of Ohio. Those assessments will be used to fund the collective industry’s education, safety and public outreach programs. The collection of those assessments by the First Purchaser is viewed as the First Purchaser’s contribution to OOGEEP.
A First Purchaser may deduct the assessment directly from any amounts that the First Purchaser owes to producers. The First Purchaser is then required to remit the assessment amount directly to OOGEEP within forty-five (45) days after each quarter.
As defined in Ohio Revised Code 1510, the assessment will be made on all production of crude oil (including condensate) and natural gas in Ohio. NGL’s are not included in this assessment. The current assessment rate is as follows:
(A) The assessment on crude oil shall be equal to five cents ($0.05) per each gross barrel of crude oil (including condensate).
(B) The assessment on natural gas shall be equal to one cent ($0.01) per gross thousand cubic feet of natural gas (Mcf).
download 1st Quarter 2017(due May 15, 2017)
download 2nd Quarter 2017(due August 15, 2017)
download 3rd Quarter 2017(due November 15, 2017)
download 4th Quarter 2017(due February 15, 2018)
download 1st Quarter 2016(due May 15, 2016)
download 2nd Quarter 2016(due August 15, 2016)
download 3rd Quarter 2016(due November 15, 2016)
download 4th Quarter 2016(due February 15, 2017)
GENERAL QUESTIONS/ ANSWERS
Can the assessment rate be increased or decreased?
The Ohio Oil and Gas Energy Education Program, nor its Operating Board, has the authority to increase the assessment amount without the approval of Ohio producers that vote in a Referendum. The assessment rate cannot exceed the rate established in Ohio Revised Code 1510. However, Ohio producers may vote in a Referendum to decrease this rate.
How often are First Purchaser’s required to remit a payment to the Program?
Ohio Revised Code 1510 states that a First Purchaser must remit a payment to the Program within forty-five (45) days after each quarter.
Can a First Purchaser pay into the Program monthly, instead of quarterly?
Are there any penalties associated with a non-payment of this assessment?
Ohio Revised Code Section 1510.13 states that “no person shall knowingly fail or refuse to withhold or remit any assessment levied under Section 1510.08 of the Revised Code.”
Ohio Revised Code Section 1510.13(B) states that “before criminal proceedings are instituted pursuant to this Section, the Ohio Department of Natural Resources, Division of Oil and Gas Resources Management’s Technical Advisory Council shall give the alleged violator an opportunity to present the alleged violator’s view concerning why the proceedings should not be instituted.”
Section 1510.99 of the Ohio Revised Code states that “whoever violates Section 1510.13 of the Revised Code is guilty of a misdemeanor of the fourth degree.”
Will the First Purchaser get a response from the Program showing that a payment was received?
A receipt or other documentation will be provided to the First Purchaser, if requested. An annual audit is also conducted with all First Purchasers in January of each year. A formal audit is also performed each year and is available to any First Purchaser and Producer. This audit is also provided to the Ohio Department of Natural Resources, Division of Oil and Gas Resources Management, as required under Ohio Revised Code 1510.
Will the first purchaser or producer have any say in how this money is spent, and if so, who should they contact with their proposals?
All first purchasers and producers are encouraged to actively participate in OOGEEP’s activities, Committees and may provide input into the Program at any time. They should contact OOGEEP directly or any of the Operating Board members.
Who makes up the Operating Board?
Ohio Revised Code 1510 requires that there are thirteen members of the OOGEEP Operating Board. Six of those members shall be independent producers and six of the members shall be primarily horizontal well operators. They must have production in Ohio, and have at least five years of active experience in the crude oil and natural gas industry. The thirteenth member must be a member of an organization that represents farmers or landowners.
Is a producer required to pay the OOGEEP Assessment?
Can a producer get a refund of their assessments?
Yes. As defined in Ohio Revised Code 1510.08, OOGEEP shall refund the assessment directly to any producer that has been assessed, after they have submitted a “Refund Application” on a form furnished by the OOGEEP Operating Board. They must be the owner or operator of the well that was assessed. OOGEEP may request information to support a refund request, however, any information provided is not a public record under Ohio Revised Code Section 149.43, and is treated as confidential.
Any producer desiring a refund must submit the Refund Application not later than the thirty-first (31) day of March, following the year in which the assessment was made. OOGEEP shall refund the assessment to the producer no later than the thirteenth (13th) day of June of the year in which the Refund Application is submitted.