1-1  By:  Harris of Dallas                                  S.B. No. 100
    1-2        (In the Senate - Filed January 13, 1993; January 14, 1993,
    1-3  read first time and referred to Committee on State Affairs;
    1-4  May 10, 1993, reported adversely, with favorable Committee
    1-5  Substitute by the following vote:  Yeas 9, Nays 0; May 10, 1993,
    1-6  sent to printer.)
    1-7                            COMMITTEE VOTE
    1-8                          Yea     Nay      PNV      Absent 
    1-9        Harris of Dallas   x                               
   1-10        Rosson             x                               
   1-11        Carriker           x                               
   1-12        Henderson                                     x    
   1-13        Leedom             x                               
   1-14        Lucio              x                               
   1-15        Luna                                          x    
   1-16        Nelson             x                               
   1-17        Patterson          x                               
   1-18        Shelley            x                               
   1-19        Sibley                                        x    
   1-20        West               x                               
   1-21        Whitmire                                      x    
   1-22  COMMITTEE SUBSTITUTE FOR S.B. No. 100         By:  Harris of Dallas
   1-23                         A BILL TO BE ENTITLED
   1-24                                AN ACT
   1-25  relating to tax and regulatory relief as incentives for the
   1-26  production of certain gas that is difficult or expensive to produce
   1-27  and to a reduced oil production tax rate for oil from certain
   1-28  enhanced recovery projects.
   1-29        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
   1-30        SECTION 1.  Section 201.057, Tax Code, is amended to read as
   1-31  follows:
   1-32        Sec. 201.057.  TEMPORARY EXEMPTION OF CERTAIN HIGH-COST GAS.
   1-33  (a)  In this section:
   1-34              (1)  "Commission" means the Railroad Commission of
   1-35  Texas.
   1-36              (2)  "Commission-approved coproduction project" means a
   1-37  reservoir development project in which the commission has
   1-38  recognized that water withdrawals from an oil or gas reservoir in
   1-39  excess of specified minimum volumes will result in recovery of
   1-40  additional oil and/or gas from the reservoir that would not be
   1-41  produced by conventional production methods and operators of wells
   1-42  completed in the reservoir have begun to implement commission
   1-43  requirements to withdraw such volumes of water and dispose of such
   1-44  water outside the subject reservoir.  Reservoirs potentially
   1-45  eligible for this designation shall be limited to those reservoirs
   1-46  in which oil and/or gas has been bypassed by water encroachment
   1-47  caused by production from the reservoir and such bypassed oil
   1-48  and/or gas may be produced as a result of reservoir-wide
   1-49  high-volume water withdrawals of natural-formation water.
   1-50              (3)  "Coproduction" means the permanent removal of
   1-51  water from an oil and/or gas reservoir in an effort to lower the
   1-52  gas-water contact or oil-water contact in the reservoir or to
   1-53  reduce reservoir pressure to recover entrained hydrocarbons from
   1-54  the reservoir that would not be produced by conventional primary or
   1-55  secondary production methods.
   1-56              (4)  "High-cost gas" means:
   1-57                    (A)  high-cost natural gas as described by
   1-58  Section 107, Natural Gas Policy Act of 1978 (15 U.S.C. Section
   1-59  3317), as that section exists on January 1, 1989, without regard to
   1-60  whether that section is in effect or whether a determination has
   1-61  been made that the gas is high-cost natural gas for purposes of
   1-62  that Act; or
   1-63                    (B)  all gas produced from oil wells or gas wells
   1-64  within a commission-approved coproduction project.
   1-65              (5)  "High-volume water withdrawals" means the
   1-66  withdrawal of water from a reservoir in an amount sufficient to
   1-67  dewater portions of the reservoir containing oil and/or gas
   1-68  previously bypassed by water encroachment.
    2-1              (6) <(3)>  "Operator" means the person responsible for
    2-2  the actual physical operation of an oil or <a> gas well.
    2-3        (b)  High-cost gas as defined in Subsection (a)(4)(A) of this
    2-4  section, produced from a well that is spudded or completed between
    2-5  May 24, 1989, <the date of enactment> and September 1, 1996, is
    2-6  exempt from the tax imposed by this chapter during the period
    2-7  beginning September 1, 1991, and ending August 31, 2001.  High-cost
    2-8  gas as defined in Subsection (a)(4)(B) of this section produced
    2-9  from any well regardless of spud date or completion date is
   2-10  eligible for a refund of tax paid and exemption from the tax
   2-11  imposed by this chapter for production occurring during the period
   2-12  beginning the first day of the month after commission approval of a
   2-13  coproduction project and ending August 31, 2001; however, in the
   2-14  event coproduction ceases, the exemption shall also cease on the
   2-15  first day of the first calendar month that begins on or after the
   2-16  91st day following the date of termination of coproduction
   2-17  operations.  Tax must be paid when due at the rate provided in
   2-18  Section 201.052 of this code for all high-cost gas, as defined in
   2-19  Subsection (a)(4)(B) of this section, produced on or before
   2-20  July 31, 1998.  On or after September 1, 1998, the operator may
   2-21  apply to the comptroller for a refund and shall be entitled to
   2-22  receive a refund of all taxes paid on such high-cost gas produced
   2-23  on or after the first day of the calendar month after commission
   2-24  approval of the coproduction project from which such gas was
   2-25  produced and which is otherwise eligible for the tax exemption.
   2-26        (c)  The operator of a proposed or existing gas well,
   2-27  including a gas well that has not been completed, or the operator
   2-28  of any proposed or existing oil or gas well within a
   2-29  commission-approved coproduction project, may apply to the
   2-30  commission for certification that the well produces or will produce
   2-31  high-cost gas.  The application may be made but is not required to
   2-32  be made concurrently with a request for a determination that gas
   2-33  produced from the well is high-cost natural gas for purposes of the
   2-34  Natural Gas Policy Act of 1978 (15 U.S.C. Section 3301 et seq.) or
   2-35  with a request for commission approval of a coproduction project.
   2-36  The commission may require an applicant to provide the commission
   2-37  with any relevant information required to administer this section.
   2-38  For purposes of this section, a determination that gas is high-cost
   2-39  natural gas for purposes of the Natural Gas Policy Act of 1978 made
   2-40  according to the definition of high-cost natural gas provided by
   2-41  Section 107, Natural Gas Policy Act of 1978 (15 U.S.C. Section
   2-42  3317), as that section exists on January 1, 1989, or a
   2-43  determination that gas is produced from within a
   2-44  commission-approved coproduction project is a certification that
   2-45  the gas is high-cost gas for purposes of this section, and in that
   2-46  event additional certification is not required to qualify for the
   2-47  exemption provided by this section.
   2-48        (d)  To qualify for the exemption provided by this section,
   2-49  the person responsible for paying the tax must apply to the
   2-50  comptroller.  The application must contain the certification of the
   2-51  commission that the well produces high-cost gas.  An application
   2-52  may not be filed before January 1, 1990, or after December 31,
   2-53  1998.  The comptroller shall approve the application of a person
   2-54  who demonstrates that the gas is eligible for the exemption.  The
   2-55  comptroller may require a person applying for the exemption to
   2-56  provide any relevant information in the person's monthly report
   2-57  that the comptroller considers necessary to administer this
   2-58  section.  The commission shall notify the comptroller in writing
   2-59  immediately if it determines that an oil or <a> gas well previously
   2-60  certified as producing high-cost gas does not produce high-cost gas
   2-61  or if it takes any action or discovers any information that affects
   2-62  the eligibility of gas for an exemption under this section.
   2-63        (e)  If, before the commission certifies that a well produces
   2-64  high-cost gas or before the comptroller approves an application for
   2-65  an exemption under this section, the tax imposed by this chapter is
   2-66  paid on high-cost gas that otherwise qualifies for the exemption
   2-67  provided by this section, the producer or producers of the gas are
   2-68  entitled to a credit against other taxes imposed by this chapter in
   2-69  an amount equal to the amount of the tax paid on the gas that
   2-70  otherwise qualified for the exemption on or after the first day of
    3-1  the next month after the month in which the application for
    3-2  certification under this section was filed with the commission.
    3-3  The credit is allocated to each producer according to the
    3-4  producer's proportionate share in the gas.  To receive a credit,
    3-5  one or more of the producers must apply to the comptroller for the
    3-6  credit not later than the first anniversary after the date the
    3-7  comptroller approves the application for an exemption under this
    3-8  section.  If a producer demonstrates that the producer does not
    3-9  have sufficient tax liability under this chapter to claim the
   3-10  credit within five years from the date the application for the
   3-11  credit is made, the producer is entitled to a refund in the amount
   3-12  of any credit the comptroller determines may not be claimed within
   3-13  that five years.  Nothing in this subsection shall relieve the
   3-14  obligation imposed by Subsection (b) of this section to pay tax
   3-15  when due on high-cost gas produced from coproduction projects on or
   3-16  before July 31, 1995.
   3-17        (f)  An applicant for commission approval of a coproduction
   3-18  project shall submit a written application for approval to the
   3-19  commission.  Such application must be filed before January 1, 1994.
   3-20  The applicant shall provide the commission with any relevant
   3-21  information required to administer this section, including evidence
   3-22  demonstrating that the reservoir is eligible for the designation
   3-23  and demonstrating the minimum volumes of high-volume water
   3-24  withdrawal required to recover oil and/or gas from the reservoir
   3-25  that would not be produced by conventional production methods.  A
   3-26  commission representative may administratively approve the
   3-27  application.  If the commission representative denies
   3-28  administrative approval, the applicant shall have the right to a
   3-29  hearing on request.
   3-30        SECTION 2.  Section 202.054, Tax Code, is amended to read as
   3-31  follows:
   3-32        Sec. 202.054.  Qualification of Oil From New or Expanded
   3-33  Enhanced Recovery Project for Special Tax Rate.  (a)  In this
   3-34  section:
   3-35              (1)  "Active operation" means the start and
   3-36  continuation of a fluid injection program for a secondary or
   3-37  tertiary recovery project to enhance the displacement process in
   3-38  the reservoir.
   3-39              (2)  "Commission" means the Railroad Commission of
   3-40  Texas.
   3-41              (3)  "Commission-approved coproduction project" means a
   3-42  reservoir development project in which the commission has
   3-43  recognized that water withdrawals from an oil or gas reservoir in
   3-44  excess of specified minimum volumes will result in recovery of
   3-45  additional oil and/or gas from the reservoir that would not be
   3-46  produced by conventional production methods and where operators in
   3-47  the field have begun to implement commission requirements to
   3-48  withdraw such volumes of water and dispose of such water outside
   3-49  the subject reservoir.  Reservoirs potentially eligible for this
   3-50  designation shall be limited to those reservoirs in which oil
   3-51  and/or gas has been bypassed by water encroachment caused by
   3-52  production from the reservoir and such bypassed oil and/or gas may
   3-53  be produced as a result of field-wide high volume water withdrawals
   3-54  of natural-formation water.
   3-55              (4)  "Coproduction project" means an enhanced recovery
   3-56  project in which water is permanently removed from an oil and/or
   3-57  gas reservoir in an effort to lower the gas-water or oil-water
   3-58  contact in the reservoir or to reduce reservoir pressure to recover
   3-59  entrained hydrocarbons from the reservoir that would not be
   3-60  produced by conventional primary or secondary production methods.
   3-61              (5)  "Enhanced recovery project" means the use of any
   3-62  process for the displacement of oil from the earth other than
   3-63  primary recovery and includes the use of an immiscible, miscible,
   3-64  chemical, thermal, or biological process and any coproduction
   3-65  project.
   3-66              (6) <(4)>  "Existing enhanced recovery project" means
   3-67  an enhanced recovery project that began active operations before
   3-68  September 1, 1989.
   3-69              (7) <(5)>  "Expanded enhanced recovery project" or
   3-70  "expansion" means the addition of injection and producing wells,
    4-1  the change of injection pattern, or other operating changes to an
    4-2  existing enhanced oil recovery project that will result in the
    4-3  recovery of oil that would not otherwise be recovered.
    4-4              (8)  "High-volume water withdrawals" means the
    4-5  withdrawal of water from a reservoir in an amount sufficient to
    4-6  dewater portions of the reservoir containing oil and/or gas
    4-7  previously bypassed by water encroachment.
    4-8              (9) <(6)>  "Incremental production" means the volume of
    4-9  oil produced by an expanded enhanced recovery project in excess of
   4-10  the production decline rate established under conditions before
   4-11  expansion for an existing enhanced recovery project.
   4-12              (10) <(7)>  "Operator" means the person responsible for
   4-13  the actual physical operation of an enhanced recovery project.
   4-14              (11) <(8)>  "Positive production response" means that
   4-15  the rate of oil production from the wells affected by an enhanced
   4-16  recovery project is greater than the rate that would have occurred
   4-17  without the project.
   4-18              (12) <(9)>  "Primary recovery" means the displacement
   4-19  of oil from the earth into the well bore by means of the natural
   4-20  pressure of the oil reservoir, including artificial lift.
   4-21              (13) <(10)>  "Production decline rate" means the
   4-22  projected future oil production from a project area as extrapolated
   4-23  by a method approved by the commission.
   4-24              (14) <(11)>  "Recovered oil tax rate" means the tax
   4-25  rate provided by Section 202.052(b) of this code.
   4-26              (15) <(12)>  "Secondary recovery project" means an
   4-27  enhanced recovery project that is not a tertiary recovery project.
   4-28              (16) <(13)>  "Tertiary recovery project" means an
   4-29  enhanced recovery project using a tertiary recovery method listed
   4-30  in the federal June 1979 energy regulations referred to in Section
   4-31  4993, Internal Revenue Code of 1986, or approved by the United
   4-32  States secretary of the treasury for purposes of administering
   4-33  Section 4993, Internal Revenue Code of 1986, without regard to
   4-34  whether that section remains in effect.
   4-35        (b)  Oil produced from an enhanced recovery project other
   4-36  than a coproduction project qualifies for the recovered oil tax
   4-37  rate if, before the project begins active operation, the commission
   4-38  approves the project and designates the area to be affected by the
   4-39  project.  The incremental production from an expanded enhanced
   4-40  recovery project other than a coproduction project  qualifies for
   4-41  the recovered oil tax rate if, before the expansion begins, the
   4-42  commission approves the expansion and designates the area to be
   4-43  affected by the expansion.  Oil produced from a commission-approved
   4-44  coproduction project, whether a new enhanced recovery project or an
   4-45  expanded enhanced recovery project, qualifies for the recovered oil
   4-46  tax rate following commission certification of a positive
   4-47  production response without regard to whether the commission
   4-48  approval is granted before or after the project begins active
   4-49  operations; however, tax must be paid when due at the rate provided
   4-50  in Section 202.052(a) of this code for all oil produced on or
   4-51  before July 31, 1998.  On or after September 1, 1998, the operator
   4-52  may apply to the comptroller for a refund and shall be entitled to
   4-53  receive a refund equal to the difference between the tax paid on
   4-54  all oil produced from a commission-approved coproduction project
   4-55  after commission certification of a positive production response
   4-56  and the tax due at the recovered oil tax rate for all oil produced
   4-57  after commission certification of a positive production response
   4-58  from such coproduction project.  The operator of a proposed
   4-59  project, <or> a proposed expansion, or a proposed or existing
   4-60  coproduction project may apply to the commission for approval of
   4-61  the project or expansion under this section.  The commission may
   4-62  require an applicant to provide the commission with any relevant
   4-63  information required to administer this section.  If approval by
   4-64  the commission of a unitization agreement under Subchapter B,
   4-65  Chapter 101, Natural Resources Code, is required for purposes of
   4-66  carrying out the project or expansion, the commission may not
   4-67  approve the project or expansion unless it approves the unitization
   4-68  agreement.  A person may apply for approval of a proposed enhanced
   4-69  recovery project, <or> a proposed expansion, or a proposed
   4-70  coproduction project under this subsection concurrently with an
    5-1  application for approval of a unitization agreement for purposes of
    5-2  carrying out the enhanced recovery project or expansion under
    5-3  Section 101.011, Natural Resources Code, or with an application for
    5-4  certification of the project or expansion as a tertiary recovery
    5-5  project for purposes of Section 4993, Internal Revenue Code of
    5-6  1986, or may make a separate application for approval.
    5-7        (c)  This section applies to an enhanced recovery project
    5-8  that begins active operation on or after September 1, 1989, and to
    5-9  an expansion that the commission approves on or after September 1,
   5-10  1991. An application for approval under this section must be filed
   5-11  on or after September 1, 1989, and before January 1, 1994, for a
   5-12  new enhanced recovery project, including any coproduction project.
   5-13  An application for approval under this section must be filed on or
   5-14  after September 1, 1991, and before January 1, 1994, for an
   5-15  expansion of an existing enhanced recovery project.  A project may
   5-16  not qualify as an expansion if the project has qualified as a new
   5-17  enhanced recovery project under this section.  An application may
   5-18  be filed on or after September 1, 1989, even if a separate
   5-19  application for approval of the project or expansion has already
   5-20  been filed under Subchapter B, Chapter 101, Natural Resources Code,
   5-21  or for approval as a tertiary recovery project for purposes of
   5-22  Section 4993, Internal Revenue Code of 1986, if the operation of a
   5-23  new project or the expansion of an existing project, other than a
   5-24  coproduction project, does not begin before the application for
   5-25  approval under this section is approved by the commission; however,
   5-26  nothing herein shall require commission approval of a coproduction
   5-27  project prior to commencing active operations on such project in
   5-28  order for such project to be eligible for the recovered oil tax
   5-29  rate.
   5-30        (d)  An applicant for commission approval of a coproduction
   5-31  project shall submit a written application for approval to the
   5-32  commission.  Such application must be filed before January 1, 1994.
   5-33  The applicant shall provide the commission with any relevant
   5-34  information required to administer this section, including evidence
   5-35  demonstrating that the reservoir is eligible for the designation
   5-36  and demonstrating the minimum volumes of high-volume water
   5-37  withdrawal required to recover oil and/or gas from the reservoir
   5-38  that would not be produced by conventional production methods.  A
   5-39  commission representative may administratively approve the
   5-40  application.  If the commission representative denies
   5-41  administrative approval, the applicant shall have the right to a
   5-42  hearing on request.
   5-43        (e)  If the commission approves an enhanced recovery project
   5-44  or an expansion under this section, it shall issue a certification
   5-45  of approval for an approved project designating the area to be
   5-46  affected by the project.
   5-47        (f) <(e)>  The recovered oil tax rate applies only to oil
   5-48  produced from a new enhanced oil recovery project, any coproduction
   5-49  project, or the incremental production caused by the expansion of
   5-50  an existing enhanced recovery project from the area the commission
   5-51  certifies to be affected by the project.
   5-52        (g)  Subject to the provisions of Subsections (b) and (i)
   5-53  <(f)  Except as provided by Subsection (h)> of this section, the
   5-54  recovered oil tax rate applies to oil on which a tax is imposed by
   5-55  this chapter for the 10 years beginning the first day of the month
   5-56  following the date the commission certifies that, in the case of an
   5-57  enhanced recovery project including a coproduction project, a
   5-58  positive production response has occurred or, in the case of an
   5-59  expansion other than one related to a coproduction project,
   5-60  incremental production has occurred, if the application for
   5-61  certification is filed:
   5-62              (1)  not later than three years from the date the
   5-63  commission approves the project if the project is designated as a
   5-64  new or existing project other than a coproduction project that uses
   5-65  a secondary recovery process; or
   5-66              (2)  not later than five years from the date the
   5-67  commission approves the project if the project is designated as a
   5-68  new or existing project that uses a tertiary recovery process or is
   5-69  a coproduction project.
   5-70        (h) <(g)>  The operator may designate the certification date,
    6-1  subject to commission approval.  If the commission determines that
    6-2  the project has caused a positive production response or
    6-3  incremental production, the commission shall certify that fact.
    6-4        (i) <(h)>  Notwithstanding Subsection (g) <(f)> of this
    6-5  section, qualification for the recovered oil tax rate ends on the
    6-6  first day of the first calendar month that begins on or after the
    6-7  91st day following the date of termination of the active operation
    6-8  of the enhanced recovery project or of termination of an approved
    6-9  expansion.
   6-10        (j) <(i)>  If the active operation of an approved enhanced
   6-11  recovery project or expansion is terminated, the person who
   6-12  immediately before the termination is the operator of the project
   6-13  shall notify the commission and the comptroller in writing not
   6-14  later than the 30th day after the last day of active operation.
   6-15  Any person who violates this subsection is liable to the state for
   6-16  a civil penalty if the person pays or attempts to pay the tax
   6-17  imposed by this chapter on oil from the project at the recovered
   6-18  oil tax rate after qualification for that rate ends under
   6-19  Subsection (g) or (i) <(f) or (h)> of this section.  The amount of
   6-20  the penalty may not exceed the sum of:
   6-21              (1)  $10,000; and
   6-22              (2)  the difference between the amount of taxes paid or
   6-23  attempted to be paid and the amount of taxes due.
   6-24        (k) <(j)>  The attorney general may recover a penalty under
   6-25  Subsection (j) <(i)> of this section in a suit brought on behalf of
   6-26  the state.  Venue for the suit is in Travis County.
   6-27        (l) <(k)>  The commission has broad discretion in
   6-28  administering this section and shall adopt and enforce any
   6-29  appropriate rules or orders that the commission finds necessary to
   6-30  administer this section concerning the designation, operation, and
   6-31  termination of enhanced recovery projects and expansions.  The
   6-32  commission shall notify the comptroller of any action taken under
   6-33  this subsection.  The comptroller shall have the power to establish
   6-34  procedures in order to comply with this Act.
   6-35        (m)  Subject to the provisions of Subsection (b) of this
   6-36  section, if <(l)  If>, before the comptroller approves an
   6-37  application for taxation at the recovered oil tax rate, the tax
   6-38  imposed by this chapter is paid at the rate provided by Section
   6-39  202.052(a) of this code on oil that qualifies under this section
   6-40  for the recovered oil tax rate, the producer or producers of the
   6-41  oil are entitled to a credit against taxes imposed by this chapter
   6-42  in an amount equal to the difference between the tax paid on the
   6-43  oil and the tax due on the oil at the recovered oil tax rate.  The
   6-44  credit is allocated to each producer according to the producer's
   6-45  proportionate share in the oil.  To receive a credit, one or more
   6-46  of the producers of the oil must apply to the comptroller for the
   6-47  credit not later than the first anniversary after the date the
   6-48  commission certifies that a positive production response has
   6-49  occurred.
   6-50        (n) <(m)>  To qualify for the taxation of oil at the
   6-51  recovered oil tax rate, a person responsible for paying the tax
   6-52  must apply to the comptroller.  The application must include the
   6-53  certification of the commission that the project or expansion has
   6-54  been approved and that the project has resulted in a positive
   6-55  production response or that the expansion has resulted in
   6-56  incremental production.  The comptroller shall approve the
   6-57  application of a person who demonstrates that the oil is eligible
   6-58  for taxation at the recovered oil tax rate.  The comptroller may
   6-59  require a person applying for the recovered oil tax rate to provide
   6-60  any relevant information in the person's monthly report and
   6-61  internal records that the comptroller considers necessary to
   6-62  administer this section.  The commission shall notify the
   6-63  comptroller in writing immediately if it determines that active
   6-64  operation of an approved enhanced recovery project or an approved
   6-65  expansion has been terminated or if it takes any action or
   6-66  discovers any information that affects the taxation of oil at the
   6-67  recovered oil tax rate.
   6-68        SECTION 3.  This Act takes effect September 1, 1993.
   6-69        SECTION 4.  The importance of this legislation and the
   6-70  crowded condition of the calendars in both houses create an
    7-1  emergency and an imperative public necessity that the
    7-2  constitutional rule requiring bills to be read on three several
    7-3  days in each house be suspended, and this rule is hereby suspended.
    7-4                               * * * * *
    7-5                                                         Austin,
    7-6  Texas
    7-7                                                         May 10, 1993
    7-8  Hon. Bob Bullock
    7-9  President of the Senate
   7-10  Sir:
   7-11  We, your Committee on State Affairs to which was referred S.B. No.
   7-12  100, have had the same under consideration, and I am instructed to
   7-13  report it back to the Senate with the recommendation that it do not
   7-14  pass, but that the Committee Substitute adopted in lieu thereof do
   7-15  pass and be printed.
   7-16                                                         Harris of
   7-17  Dallas, Chairman
   7-18                               * * * * *
   7-19                               WITNESSES
   7-20                                                  FOR   AGAINST  ON
   7-21  ___________________________________________________________________
   7-22  Name:  Doug Dashiell                             x
   7-23  Representing:  Arch Petroleum Inc.
   7-24  City:  Ft. Worth
   7-25  -------------------------------------------------------------------
   7-26  Name:  Don Ray George                            x
   7-27  Representing:  Arch Petroleum Inc.
   7-28  City:  Ft. Worth
   7-29  -------------------------------------------------------------------
   7-30  Name:  Don Kennard                               x
   7-31  Representing:  Arch Petroleum Inc.
   7-32  City:  Ft. Worth
   7-33  -------------------------------------------------------------------