2012 Professional Land Management Certificate Program

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2012

Professional

Land Management

Certificate Program

Houston • Austin • San Antonio, TX • Oklahoma City, OK

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PETEX: Training for 67 Years and Going Strong

The Petroleum Extension Service (PETEX®), a unit of the Division of Continu-ing and Innovative Education at The University of Texas at Austin, has been training companies and individuals since 1944. Headquartered at the J.J. Pick-le Research Campus, in North Austin, PETEX develops, produces, and deliv-ers technical and nontechnical training courses, publications, and e-learning training materials for the oil and gas industry.

PETEX conducts hands-on training courses at its PETEX Learning and As-sessment Centers at these locations:

• In North Houston at 4702 North Sam Houston Parkway West at Bammel Business Park

• In West Texas on The University of Texas-Permian Basin campus in Odessa

• At offsite locations as designated and at client sites globally upon request

Training courses, materials, and publications are developed to industry standards and for individuals requiring fundamental and advanced knowl-edge of petroleum industry operations.

Our mission is to ensure continued value to the energy industry by pro-viding up-to-date, quality courses and publications to meet clients’ needs. With the guidance and support of its Advisory Board, PETEX serves as an ambassador for the industry and continues to deliver the best-of-class train-ing solutions.

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Professional Land Management

CertifiCate Program

The Professional Land Management Certificate Program is designed for those who want to pursue a career in petroleum land-related activities. The course schedule was developed to enable students to earn the entire certifi-cate in one semester, or within a semester’s time period, if they are willing to travel between San Antonio, Austin, Houston, and Oklahoma City to attend classes held at alternate locations. Some participants might opt to take only specific courses to supplement their existing knowledge.

The program is designed for: • Landmen

• Land technicians • Lease and title analysts • Division order analysts • Lease records clerks • Attorneys

• Persons involved in supporting exploration and development ac-tivities

• Persons who want to gain an understanding of the field of land management

The curriculum consists of twelve courses that equip graduates with neces-sary skills to build a career in land management. Each course is one to two days in length. Upon successful completion of the twelve-course program, students are awarded a Professional Land Management Certificate. Students who successfully complete selected courses can also receive an official certifi-cate of course completion. The courses within the program are approved for continuing education credits with the American Association of Professional Landmen (AAPL) and the State Bar of Texas. Students can also apply for professional credits with the National Association of Lease and Title Ana-lysts (NALTA), the North American Division Order AnaAna-lysts (NODOA), and the National Association of Royalty Owners (NARO).

Quality Education in a Condensed Format

The program was developed in response to inquiries about developmental courses for persons involved in the petroleum industry but lacking formal training in land management skills. Other inquirers were looking for prac-tical training to supplement their studies in Petroleum Land Management (PLM) programs, law school, or other educational programs. This program bridges the education gap for those who want university-quality instruction in a condensed manner without the pressure of exams. The option of attend-ing courses held at three Texas locations helps students earn their certificate rapidly and expedites their ability to seek career opportunities.

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Required Courses

Essential Concepts for Petroleum Land Management 2 Days

Oil and Gas Law for the Petroleum Industry 2 Days

Critical Concepts for Understanding and Negotiating

the Oil and Gas Lease 2 Days

Calculating Oil and Gas Interests 1 Day

Oil and Gas Contracts—Effective Use 2 Days

Interpreting and Understanding Critical Title Issues for PLM 1 Day

Effective Methods for Curing an Oil/Gas Lease and

Petroleum Land Title Defects 2 Days

Due Diligence in the Acquisition and Divestiture of Oil

and Gas Properties 1 Day

Understanding Joint Operating Agreements 1 Day

Farmouts: Critical Concepts and Practices 1 Day

Understanding and Settling Surface Damage Claims 1 Day

Advanced Concepts and Practices for Effective

Land Management 2 Days

Course Descriptions

Essential Concepts for Petroleum Land Management (2 Days)

This course provides a broad overview of the most-needed information related to petroleum land management with significant time focused on oil and gas leases, other types of oil and gas contracts, and understanding critical petroleum land title problems and solutions. Specific topics include types of land ownership, severance of minerals, land descriptions, and de-termination of mineral ownership, including undivided interests, the rule of capture, and the role of the recording system. Students learn how leases are acquired and how to evaluate lease provisions. A brief review of pool-ing and unitization and the role of state and federal regulatory agencies is provided. Other topics include how to calculate royalties, overriding royal-ties, working interests, net revenue interests, and the importance of lease administration. Reviews include the concept of the due diligence process used when buying and selling mineral interests, critical problems for titles, curative measures for those problems, and title opinions. Finally, key oil and gas contracts are discussed for fundamental elements and critical details concerning farmouts, support agreements, and joint operating agreements (JOAs). Internet tools and ethics in the oil and gas industry are also dis-cussed. Cases and practical exercises are included.

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Oil and Gas Law for the Petroleum Industry (2 Days)

To compete—and excel—in this industry, one must understand the property interests that are commonly created in oil and gas and the land from which they are produced. This course begins with a review of the landowner’s interests in oil and gas, the nature and characteristics of mineral interests, the rights and du-ties between surface and mineral owners, the creation and duration of mineral leases, and different kinds of royalty and mineral interests. Students will learn about the law governing oil and gas ownership,

devel-opment, marketing, and transfer. The oil and gas industry uses a number of unique contractual arrangements to explore for, develop, produce, and mar-ket oil and gas. This course includes an overview of key clauses of oil and gas leases and conveyances, along with an examination of the law govern-ing farmout agreements, agreements for the sale and exchange of producgovern-ing properties, operating agreements, drilling contracts, production sales con-tracts, the law governing oil and gas development on federal public lands, pooling agreements, and unitization agreements. State oil and gas conserva-tion issues are discussed in a historical context to understand the evoluconserva-tion of the “rule of capture” and “doctrine of correlative rights” and how this led to regulation of drilling and production, as well as the importance of understanding spacing rules and pooling and unitization. Finally, time is devoted to environmental laws that apply to the exploration, development, and production of oil and gas. Cases and practical exercises are included. Critical Concepts for Understanding and Negotiating

the Oil and Gas Lease (2 Days)

This course focuses on the critical concepts necessary to understand and negotiate the more common provisions of an oil and gas lease. Students gain a better understanding of Termination vs. Savings clauses and are able to evaluate alternative wording and the implications of striking or modifying the following: (1) clauses in the lease including the granting, royalty, as-signment, warranty, and force majeure clauses; (2) limits and rights of surface operations; (3) the duration of the lease; (4) the extension of the primary and secondary terms of the lease; (5) surface damages; (6) pooling, or consoli-dating the leased premises with adjoining leased tracts; and (7) the lessee’s right to free water, oil, and gas. Addition–ally, students learn negotiating techniques that have proven effective in leasing. Finally, special problems are presented and discussed, including the following: (a) What is production in paying quantities? (b) What are the implied covenants owed to the lessor? (c) Can minerals be produced without the agreement of a mineral owner? Cases and practical exercises are included.

Required Courses

Essential Concepts for Petroleum Land Management 2 Days

Oil and Gas Law for the Petroleum Industry 2 Days

Critical Concepts for Understanding and Negotiating

the Oil and Gas Lease 2 Days

Calculating Oil and Gas Interests 1 Day

Oil and Gas Contracts—Effective Use 2 Days

Interpreting and Understanding Critical Title Issues for PLM 1 Day

Effective Methods for Curing an Oil/Gas Lease and

Petroleum Land Title Defects 2 Days

Due Diligence in the Acquisition and Divestiture of Oil

and Gas Properties 1 Day

Understanding Joint Operating Agreements 1 Day

Farmouts: Critical Concepts and Practices 1 Day

Understanding and Settling Surface Damage Claims 1 Day

Advanced Concepts and Practices for Effective

Land Management 2 Days

Course Descriptions

This course provides a broad overview of the most-needed information related to petroleum land management with significant time focused on oil and gas leases, other types of oil and gas contracts, and understanding critical petroleum land title problems and solutions. Specific topics include types of land ownership, severance of minerals, land descriptions, and de-termination of mineral ownership, including undivided interests, the rule of capture, and the role of the recording system. Students learn how leases are acquired and how to evaluate lease provisions. A brief review of pool-ing and unitization and the role of state and federal regulatory agencies is provided. Other topics include how to calculate royalties, overriding royal-ties, working interests, net revenue interests, and the importance of lease administration. Reviews include the concept of the due diligence process used when buying and selling mineral interests, critical problems for titles, curative measures for those problems, and title opinions. Finally, key oil and gas contracts are discussed for fundamental elements and critical details concerning farmouts, support agreements, and joint operating agreements (JOAs). Internet tools and ethics in the oil and gas industry are also dis-cussed. Cases and practical exercises are included.

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Calculating Oil and Gas Interests (1 Day)

This course is intended to equip land professionals with critical skills for calculating interests found in leases, assignments, operating agreements, and associated documents. This course begins with simple examples and progresses towards complex ones, such as learning the fundamental calcula-tions for royalties, overriding royalty interest (ORRIs), net revenue interests (NRI), and working interest (WI). After attending this workshop, students learn the fundamental progressions and calculations of NRI and WI as an unleased mineral interest is leased and becomes part of a producing tract, oil unit, gas unit, and field-wide unit. Students learn the consequences of changing WI & NRI for leases, assignments, unitizations, farmout BPO/ APO scenarios, and joint operating agreement (JOA) non-consent penalties. In addition, students gain an understanding of the role of convertible and terminating interests—for example, when a farmor’s ORRI is converted to a partial WI at payout, or when a non-operator goes non-consent after signing a JOA or does not approve an AFE, and the relationship enters the penalty phase. Cases and practical exercises are included.

Oil and Gas Contracts—Effective Use (2 Days)

In this course, students become familiar with the most important and widely used contracts in the oil and gas industry, and learn about some of the most challenging and critical issues of oil and gas leases, assignments, farmouts, exploration, and joint operating agreements (JOAs). Students learn the role of seismic options, gas balancing agreements, area of mutual interest agreements

(AMIs), joint venture agreements, and confidentiality agreements. Students are taught the elements of a contract, defenses against the enforcement of contracts, and the importance of the Statute of Frauds. Cases and practical exercises are included.

Interpreting and Understanding Critical Title Issues for PLM (1 Day) This class covers crucial information for the land professional dealing with critical title issues and conveyances that affect how oil and gas interests are calculated and maintained. Numerous topics related to title problems are reviewed, including acreage discrepancies, after-acquired property, after-dis-covered or omitted property, the Duhig Rule, execution defects, mechanics’ and material-men’s liens, the rule related to interest conveyed vs. land de-scribed, descent and distribution, homestead laws, life tenancy issues, and term mineral conveyances. Students review and understand key aspects of curative methods and the role of different types of title opinions. Cases and practical exercises are included.

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Effective Methods for Curing an Oil/Gas Lease and Petroleum Land Title Defects (2 Days)

This course presents the important function of curing land titles. To write, or clearly understand, title opinion, one needs to know exactly what a title opinion is and why there is a need to cure some titles. In this course, students review, discuss, and understand key ideas concerning preliminary, acquisi-tion, supplemental, drilling, and division order title opinions, and types of curative instruments for defective titles (including lease amendments, des-ignation or change in depository, amendment of description, extension of primary term, the amendment of the lease, and various types of affidavits). Students learn about other curative instruments, such as ratifications, con-sent to pool, the release of the oil and gas lease, the release of the deed of trust or lien, the subordination of liens, tax certificates, statements of tenant, quitclaim deeds, stipulation of interest, and certified or exemplified copies. Cases and practical exercises are included.

Due Diligence in the Acquisition and Divestiture of Oil and Gas Properties (1 Day)

The buyer is charged with knowledge of all defects or deficiencies that he or she could have discovered through the exercise of due diligence in examin-ing the property, the official title records, and the records of the seller. Due diligence refers to the buyer’s examination of these records. The buyer typi-cally has access to both the property and pertinent records of the seller for the purpose of examination. Students learn the methods used for successful due diligence and how to apply them. They also learn that any objections to title or the physical condition of the property not presented to the seller by a given date will be deemed to have been waived and the buyer will have to accept the property in an as-is condition. Land professionals are typically involved in this process and sometimes, in participating in the curing of such defects. Students review the use of checklists and effective methods. Both inside and outside examination are reviewed and tips are presented for coordinating the entire due diligence search in a cost-effective and timely manner. Cases and practical exercises are included.

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Understanding Joint Operating Agreements (1 Day)

In this course, students come to understand what may be the most common agreement for upstream oil and gas operations, the joint operating agree-ment (JOA). We look at the history of the AAPL Model Form 610 Operating Agreement, the strengths and weaknesses of the agreement, and ways to avoid problems in using it. Class discussions include the role and duties of the operator, basics of joint operations, the relationship and duties to non-operators, joint operations under pooling and unitization, property provi-sions such as preferential purchase rights, proviprovi-sions of JOAs, liabilities of the parties, cost overruns, COPAS overhead litigation, the loss of lease rights, the failure to reassign subleased interests, recent court decisions, non-consent issues, insurance and other risk-management issues, tax planning for joint operations, joint operations not covered by the typical agreement, the marketing of the land’s productive

capacities, enforcing the agreement, removing the operator, exhibits to the agreement, accounting procedures, and audits. Students understand how mod-el forms from previous years can yimod-eld significantly different results. Cases and practical exercises are included.

Farmouts: Critical Concepts and Practices (1 Day)

This course provides an overview of the widely used farmout agreement, begin-ning with its history and how it is

typi-cally defined and distinguished from other agreements. This course reviews requirements for validity and how particular types of farmout agreements or terms in the agreements are used (or misused). Students learn how to apply knowledge of undivided interests, farmouts combined with other agreements, limitations as to depth or formation, assignments, drilling re-quirements, simple farmouts subject to “back-in” provisions, and whether farmouts create a carried interest. The course reviews the costs recoverable by the farmee, such as expenses from blowouts and litigation, and interest on expenditures for mineral exploration. It also covers the farmor’s retained interests and the extent of interests conveyed, as well as how and why farmouts create various interests or relationships. Discussions include gas balancing agreements, convertible overriding royalty payments payable to the farmor, working interest options, preferential purchase rights, the effect of hold harmless clauses, the performance of the contracting parties, breach of contract, and damages when things go wrong. Cases and practical exercises allow students to practice negotiating farmout agreements involving differ-ent deal terms.

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Understanding and Settling Surface Damage Claims (1 Day)

As the law exists today in Texas, the owner of a mineral lease, rather than the surface estate owner, possesses the dominant estate. This dominance al-lows the mineral lessee to use as much of the surface owner’s land as is reasonably necessary for the production of minerals, including oil and gas. During the course of exploration and production, the surface owner’s land, water, crops, or livestock are often damaged. The right of the mineral owner to enter the land and do what is necessary to capture its minerals has been recognized in Texas since 1862. Over the years, Texas courts have struggled to determine what duties, if any, the mineral owner owes to the landowner when the surface is used for the exploration of oil and gas. The law concern-ing the mineral owner’s rights to the surface has evolved over time, from unyielding favor for the mineral estate, to recognition of the surface owners’ interests, to the attempt at present to balance the rights of the two conflict-ing estates. Students learn that the ultimate conflict to be resolved in most surface damage litigation is whether the mineral estate owner’s use of the surface is reasonable, and that the question of reasonable use is answered on a case-by-case basis by employing such concepts as due regard to the rights of the surface owner, accommodations of rights, and alternative methods of pro-duction. As a result of the use of these concepts without regularity or clear definition, there is too much uncertainty about the likely outcomes of litiga-tion. In this environment, the settlement of surface damages is more likely to have a favorable outcome than litigation, so this course focuses primarily on effective and efficient settlement, but uses cases and a workshop approach to understand what can happen if litigation occurs. Cases and practical ex-ercises are included.

Advanced Concepts and Practices for Effective Land Management (2 Days)

This course focuses on further development of the technical skills related to the terminology, methodology, planning, and strategies of professional land management from the perspective of key decision makers. Concepts from earlier courses in the program are presented in a more advanced way. Topics include area of mutual interest agreements (AMIs), joint operating agreements (JOAs), and farmouts. Students learn about key financial ratios used by management, lenders, and investors to make key decisions affecting the firm and the application of oil and gas tax to financing decisions. “Go or no-go” decision models used as part of the capital budgeting decision-making process are presented, including financial metrics such as payback, discounted payback, profitability index, net present value, and internal rate of return. The class works with decline curves, reserve estimation, and key concepts of petroleum economics. In addition, students learn about tools available on the Internet and ethics in the oil and gas industry. Cases and practical exercises are included.

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Class Schedule (Spring 2012)

The following classes will be offered in all four cities. In each city, the program begins with the course Essential Concepts for Petroleum Land Management. Following that class different classes will be offered each month in each city, so that a person can graduate within one semester, if he or she chooses to.

There is no required sequence of classes, so a person can start at any time and once he or she completes all twelve classes, a certificate will be awarded.

Feb. 1 & 2, 2012 Austin, TX

Feb. 7 & 8, 2012 Houston, TX

Feb. 13 & 14, 2012 San Antonio, TX

Feb. 20 & 21, 2012 Oklahoma City, OK Oil and Gas Law for the Petroleum Industry (2 Days) Feb. 9 & 10, 2012 Houston, TX

Feb. 17 & 18, 2012 Austin, TX

Feb. 27 & 28, 2012 Oklahoma City, OK

Apr. 13 & 14, 2012 San Antonio, TX

Critical Concepts for Understanding and Negotiating the Oil and Gas Lease (2 Days)

Mar. 5 & 6, 2012 Oklahoma City, OK Mar. 14 & 15, 2012 Houston, TX

Apr. 11 & 12, 2012 Austin, TX

Apr. 25 & 26, 2012 San Antonio, TX

Calculating Oil and Gas Interests (1 Day) Feb. 11, 2012 Houston, TX

Feb. 15, 2012 San Antonio, TX

Feb. 16, 2012 Austin, TX

Mar. 12, 2012 Oklahoma City, OK Oil and Gas Contracts—Effective Use (2 Days) Mar. 8 & 9, 2012 Oklahoma City, OK Apr. 4 & 5, 2012 Houston, TX

May 14 & 15, 2012 Austin, TX

May 21 & 22, 2012 San Antonio, TX

Interpreting and Understanding Critical Title Issues for PLM (1 Day) Mar. 13, 2012 Oklahoma City, OK

Mar. 16, 2012 Houston, TX

May 16, 2012 Austin, TX

May 23, 2012 San Antonio, TX

Effective Methods: Curing an Oil and Gas Lease and Petroleum Land Title Defects (2 Days)

Apr. 2 & 3, 2012 Oklahoma City, OK

May 24 & 25, 2012 San Antonio, TX

May 29 & 30, 2012 Houston, TX

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Due Diligence in the Acquisition and Divestiture of Oil and Gas Properties (1 Day) Apr. 16, 2012 Oklahoma City, OK

May 17, 2012 Austin, TX

May 31, 2012 Houston, TX

June 18, 2012 San Antonio, TX

Understanding Joint Operating Agreements (1 Day) Apr. 17, 2012 Oklahoma City, OK

June 6, 2012 Austin, TX

June 11, 2012 Houston, TX

Farmouts: Critical Concepts and Practices (1 Day) Apr. 30, 2012 Oklahoma City, OK

June 7, 2012 Austin, TX

June 12, 2012 Houston, TX

Understanding and Settling Surface Damage Claims (1 Day) May 1, 2012 Oklahoma City, OK

June 8, 2012 Austin, TX

June 13, 2012 Houston, TX

Advanced Concepts and Practices for Effective Land Management (2 Days) May 7 & 8, 2012 Oklahoma City, OK

June 14 & 15, 2012 Houston, TX

June 25 & 26, 2012 Austin, TX

June 27 & 28, 2012 San Antonio, TX

For details and a map of course locations, visit www.utexas.edu/ce/petex/ our_courses/plm_cert.

Class Times

Weekdays and designated weekends: 8:30 a.m. to 4:30 p.m.

Cost and Registration

Course Fees (per student)

City 1 day 2 day

Houston, TX $270 $525

Austin, TX $300 $575

San Antonio, TX $300 $575 Oklahoma City, OK $300 $575

The price includes a workbook for each class. Registration is open now. To enroll online, click this link: http://www.utexas.edu/ce/petex/our_cours-es/plm_cert. PETEX reserves the right to change pricing as necessary.

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Cancellation/Refund Policy

• To reschedule a class, advance notice of three (3) business days is required.

• To cancel a class and receive a refund minus a processing fee of $50, advance notice of three (3) business days is required.

Cancellations or reschedules less than three (3) business days from the class start date will result in no refund; however, the fee can be applied to another class. Any and all fees paid toward classes canceled by The University of Texas will be promptly refunded or applied to a later class at the student’s discretion. All registrations will be confirmed.

Special Discounts

Student 10% discounts apply to: • University of Texas Alumni • Senior Citizens (55 years and older)

• Employers Sendng More Than Three (3) People

Certificate

Upon successful completion of the Professional Land Management Certificate Program, each student will receive a completion certificate from The Univer-sity of Texas at Austin-PETEX. This certificate verifies that the student has at-tended the necessary courses and participated in the approved curriculum to obtain the knowledge deemed necessary to perform the role of land manage-ment professional. The Professional Land Managemanage-ment Certificate is awarded after completion of the program. Each graduate will need to notify PETEX that all program requirements have been met, and an official completion certificate will be issued within two weeks. Students completing individual courses can request a Course Completion Certificate by notifying PETEX after successfully completing the course or courses in which they enrolled.

Contact

To notify PETEX of program completion or for more information, contact the PETEX Learning and Assessment Center at: www.utexas.edu/ce/petex, 800.687.7052, or email [email protected].

About the Instructor

Dr. Patrick Fitzgerald, Ph.D., Ed.D., J.D. practices law with the firm Fitzger-ald & Associates with offices in Dallas and Oklahoma City, where his prac-tice includes various areas of law related to the oil and gas industry. He teaches a variety of land and energy classes and for many years has been a lecturer in various areas of land management. Dr. Fitzgerald is an accom-plished author and a contributor to Landman, a bimonthly publication of the American Association of Professional Landmen.

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Calculating Oil and Gas Interests

Essential Concepts for Petroleum

Land Management

Oil and Gas Law for the Petroleum

Industry

Land Management

Industry

Land Management

Industry

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Critical Concepts for Understanding and Negotiating the Oil and Gas Lease

Oil and Gas Contracts—Effective Use

Interpreting and

Understanding Critical Title Issues for PLM

Understanding Critical Title Issues for PLM Critical Concepts for Understanding and Negotiating the Oil and Gas Lease

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Due Diligence in the Acquisition and _{Divestiture of Oil and} Gas Properties Farmouts: Critical Concepts and

Practices

Understanding Joint Operating Agreements

Critical Concepts for Understanding and Negotiating the Oil and Gas Lease Critical Concepts for Understanding and Negotiating the Oil and Gas Lease

Effective Methods for an Curing Oil and Gas Lease and Petroleum Land T

itle Defects

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Interpreting and Understanding Critical Title Issues for PLM

Understanding Critical Title Issues for PLM

Effective Methods for Curing an Oil and Gas Lease and Petroleum Land T

itle Defects

Due Diligence in the Acquisition and _{Divestiture of Oil and} Gas Properties Effective Methods for Curing an Oil and Gas Lease and Petroleum Land T

itle Defects

Understanding and Settling Surface Damage Claims

Advanced Concepts and Practices for Effective Land Management

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Advanced Concepts and Practices for Effective Land Management

Advanced Concepts and Practices for Effective Land Management Advanced Concepts and Practices for Effective Land Management

Due Diligence in the Acquisition and _{Divestiture of Oil and} Gas Properties Understanding Joint Operating Agreements

Understanding Joint Operating Agreements Farmouts: Critical Concepts and

Practices

Farmouts: Critical Concepts and

Practices

Understanding and Settling Surface Damage Claims Understanding and Settling Surface Damage Claims

Understanding Joint Operating Agreements Farmouts: Critical Concepts and

Practices

Understanding and Settling Surface Damage Claims

Effective Methods: Curing an Oil and Gas Lease and Petroleum Land T

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