ASSESSMENT/ COLLECTION OF ASSESSMENT
In accordance with Ohio Revised Code 1510 and the official OOGEEP “Program,” the Ohio Oil and Gas Energy Education Program (OOGEEP) is funded by Ohio’s crude oil and natural gas producers through an assessment on the production of all crude oil and natural gas produced in Ohio. If you are a new Ohio natural gas or crude oil producer, first purchaser or marketer, please contact OOGEEP for more information regarding this public outreach and education program and funding obligations under Ohio Revised Code 1510.
(Special Note: This assessment should not be confused with fees associated with the heat content agreement, severance taxes or any other taxes or fees paid by the industry)
In March 2017, Ohio Producers voted in a statewide referendum to make a number of amendments to the OOGEEP “Program” which included a reduction in the assessment rate. Effective July 1, 2017, the assessment is:
- Five cents ($.05) per gross barrel of crude oil (including condensate)
- One-half cent ($.005) per gross Mcf (thousand cubic feet) of natural gas
(Special Note: Ohio Revised Code 1510 still shows a rate of $.01 (one cent) per gross Mcf. This is because this is an “up to” amount. Amendments to the OOGEEP “Program” approved by Ohio producers in March 2017 officially reduced the natural gas assessment by 50%.)
Under Ohio Revised Code 1510, all First Purchasers/ Marketers of crude oil and natural gas are required to collect and remit these assessments directly to OOGEEP within 45 days after each quarter. Annually these assessments are formally audited. The following are the approved quarterly assessment forms:
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)
Effective July 1, 2017, and accordance with Ohio Revised Code 1510 and the amended OOGEEP “Program,” any horizontal shale producer may elect to participate in a direct assessment pay option instead of the first purchaser/ marketer deduction payment. The Horizontal Producer Direct Assessment Pay Application must be remitted directly to OOGEEP and approved by the OOGEEP Operating Board. Upon approval, this option also allows the horizontal producer to incorporate a minimum assessment cap each year. For questions on this horizontal producer application, please contact OOGEEP.
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 the official OOGEEP “Program“ 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 (TAC). While the TAC has limited oversight (i.e. officially appoints the OOGEEP Board), 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 approved by Ohio Revised Code 1510 and/or through another Producer Referendum to amend the OOGEEP “Program.“
DEFINITION OF A FIRST PURCHASER
Ohio Revised Code 1510 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 OOGEEP “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.
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 and the OOGEEP “Program,“ 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 and amended 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 half cent ($0.005) per gross thousand cubic feet of natural gas (Mcf).
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 to amend the OOGEEP “Program.“ The assessment rate cannot exceed the rate established in Ohio Revised Code 1510.
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.”
Will the First Purchaser get a response from OOGEEP 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 or Producer upon request. 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 producers, first purchasers and oil and gas contractors are encouraged to actively participate in OOGEEP’s projects or serve on one of many Committees. They may also contact OOGEEP or any of the OOGEEP Operating Board members with ideas, suggestions or concerns.
Who makes up the Operating Board?
Ohio Revised Code 1510, and the amended OOGEEP “Program“ require that there are up to thirteen Operating Board members. Six of those members shall be independent producers and six of the members shall be primarily horizontal well operators. All producer Board members 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 and the OOGEEP “Program,“ OOGEEP shall refund the assessment directly to any producer that has been assessed, after they have submitted a “Refund Application” on a form approved and 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 and that information shall be 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.