Michael S. Johnson (#6903) Christopher Shiraldi (#13355) Special Assistant Attorneys General Sean D. Reyes (#7969) UTAH ATTORNEY GENERAL 675 East 500 South, Suite 500 Salt Lake City, Utah 84102 Telephone: (801) 538-5100 mjohnson@utah.gov cshiraldi@utah.gov Attorneys for Respondent Utah School and Institutional Trust Lands Administration

UTAH SCHOOL AND INSTITUTIONAL TRUST LANDS ADMINISTRATION

BOARD OF TRUSTEES

EOG RESOURCES, INC.,

Petitioner, v. UTAH SCHOOL AND INSTITUTIONAL TRUST LANDS ADMINISTRATION, OFFICE OF THE DIRECTOR,

Respondent.

JOINT REPORT CONCERNING HEARING EXAMINER CANDIDATES

AND MOTION TO APPOINT GEOFFREY HEATH AS HEARING

EXAMINER

Petitioner EOG Resources, Inc., (“EOG”) and Respondent the Utah School and

Institutional Trust Lands Administration (“SITLA”) (collectively, the “Parties”), submit this joint

report concerning hearing examiner candidates and motion to appoint Geoffrey Heath as the

hearing examiner in this matter.

REPORT CONCERNING HEARING EXAMINER CANDIDATES

The Parties requested, and the Board has elected to appoint, a hearing examiner with the

specialized knowledge necessary to resolve the disputed royalty accounting issues in this

complex matter. Pursuant to the Board’s October 31, 2018 Order, the Parties have conducted a

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search for hearing examiner candidates and have attempted to stipulate to a list of qualified

individuals. Few people nationally possess a high level of expertise in this specific area, which

has made compiling a list of available and interested candidates with no conflicts of interest

challenging.

The Parties contacted a number of candidates concerning their availability to serve as

hearing examiner. One of the candidates contacted by the Parties had a conflict of interest, and

another was unavailable due to a busy schedule. The parties have spoken with two very

qualified, available candidates whose backgrounds are summarized below. Fortunately,

Geoffrey Heath, the candidate both parties agree is the most qualified to serve as hearing

examiner, has recently retired to Salt Lake City and is available to serve. As addressed below,

SITLA and EOG therefore move the Board for his appointment.

HEARING EXAMINER CANDIDATES

Craig R. Carver: Mr. Carver is an attorney with the law firm of Carver, Schwarz, McNab,

Kamper and Forbes in Denver, Colorado. He is a highly experienced oil and gas attorney whose

practice focuses on the extraction, transportation and marketing of oil and gas and other natural

resources. As part of his general oil and gas background, Mr. Carver has specific experience

with royalty-related disputes. He is a frequent lecturer and is the author of numerous natural

resources development-related articles. A copy of Mr. Carver’s profile from his law firm’s

website is attached at Exhibit A.

Geoffrey Heath: Mr. Heath is recently retired to Salt Lake City from Washington, D.C. He

served for 31 years as an attorney, or administrative law judge, in the Department of the Interior.

As reflected on his resume, attached as Exhibit B, Mr. Heath was specifically assigned for many

of these years to handle royalty-related issues. He is highly experienced in royalty valuation

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questions of the kind in dispute in this case, having litigated cases, published papers, and

rendered decisions in this area. Of particular interest to the parties is Mr. Heath’s experience

acting as a neutral judge for the Interior Board of Land Appeals (IBLA) in resolving royalty-

related disputes.

MOTION TO APPOINT GEOFFREY HEATH AS HEARING EXAMINER

As reflected on his resume, Mr. Heath is highly experienced in the specific kinds of

royalty valuation matters at issue in this case. One of the primary aims of the Parties in

requesting appointment of a hearing examiner was to take advantage of this kind of specialized

knowledge. Mr. Heath is the only candidate with experience acting as a neutral judge and

presiding over administrative proceedings in royalty cases. Because Mr. Heath resides here in

Salt Lake City, the Trust will not have to pay any travel or lodging expenses for Mr. Heath in

this matter, and the scheduling of hearings will be simplified. Given his ideal combination of

royalty valuation knowledge, experience as a neutral judge, and local availability, the Parties

each view Mr. Heath as their top choice for the hearing examiner role. The Parties therefore

jointly move the Board to appoint Mr. Heath as hearing examiner in this matter pursuant to Utah

Admin. Code R850-8-1500.

Respectfully submitted this 14th day of November, 2018,

UTAH SCHOOL AND INSTITUTIONAL TRUST LANDS ADMINISTRATION _/s/ Michael S. Johnson________________ Michael S. Johnson Attorney for Respondent Utah School and Institutional Trust Lands Administration

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HOLLAND & HART LLP

_/s/ Shawn T. Welch_________________ Shawn T. Welch Chelsea J. Davis Attorneys for Petitioner EOG Resources, Inc.

CERTIFICATE OF SERVICE

I, the undersigned, hereby certify that on November 14, 2018 I caused a copy of the

foregoing document to be served via email upon:

Mark E. Burns Highways & Utilities Division Director Utah Attorney General's Office Counsel to the Utah School and Institutional Trust Lands Administration Board of Trustees 160 East 300 South, 5th Floor Salt Lake City, Utah 84111 markburns@agutah.gov

___/s/ Michael S. Johnson___________

EXHIBIT A

CRAIG R. CARVER

Member

Location:

Denver, Colorado

Phone:

(303) 893-1815

Fax:

(303) 893-1829

Email:

E-mail Me

Craig's practice focuses on representing companies involved in extraction, transportation and marketing of oiland gas and other natural resources. It involves both transactional and litigation components.

Examples include, on the transactional side, negotiation and drafting of natural gas marketing, gathering andtransportation agreements, major oil and gas property acquisitions and dispositions, farm-out agreements, jointoperating and unitization agreements, project financings, and negotiations with federal and state authoritiesconcerning access rights, permits, royalties and environmental compliance issues.

On the litigation side, Craig has extensive lead counsel trial experience in complex cases in federal and statecourts and in arbitration, covering the gamut from take-or-pay and natural gas purchase and transportation issuesto operational, royalty and other leasehold disputes, valuation, tax, and environmental issues.

He also has experience in dealing with a wide variety of administrative agencies, including the Bureau of LandManagement, the Minerals Management Service, the United States Forest Service, the Environmental ProtectionAgency, the Federal Energy Regulatory Commission and state oil and gas and public utility commissions. Hehas also served as an arbitrator in disputes involving oil and gas and surface use disputes. He also providesadvice and assistance to land tenants concerning the relationships between mineral development andconservation easements.

Craig served as president of the Rocky Mountain Mineral Law Foundation in 2007-2008. He is consistentlyhonored as one of the Best Lawyers in America and Colorado Super Lawyers in the fields of Energy and NaturalResources Law.

He is a frequent lecturer on natural resource subjects, particularly those involving the leasing of federal oil and

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gas interests. He has authored numerous articles in the natural resources area, such as: The New Standing andRipeness Doctrines: Who Can Challenge Public Lands Decisions, and When? 45 Rocky Mtn. Min. L. Inst.(1999) and Natural Gas Price Indices: Do They Provide a Sound Basis for Sales and Royalty Payments? 42Rocky Mtn. Min. L. Inst. (1996).

Prior to the merger of Carver & Kirchhoff into Schwarz McNab & Bailey in 2004, he served as a partner of:Carver & Kirchhoff (2002-2003); Alfers & Carver (1996-2002); Gibson, Dunn & Crutcher (1982 1996) andHead, Moye, Carver & Ray (1976-1982).

He has practiced in Denver since 1974. He is a graduate of Stanford University (A.B., with distinction, 1970)and the University of Denver (J.D., order of St. Ives, 1974).

Areas of Practice

Natural ResourcesOil and Gas LawEnergyLitigationBusiness TransactionsCommercial Real Estate

Litigation Percentage

65% of Practice Devoted to Litigation

Bar Admissions

Colorado, 1974U.S. District Court District of ColoradoU.S. Court of Appeals 10th Circuit, 1974U.S. Supreme Court, 1981

Education

University of Denver College of Law, Denver, Colorado

J.D. - 1974

The University of Michigan Law School, Ann Arbor, Michigan

Stanford University, Stanford, California

A.B. - 1970

Honors: With Distinction

Classes/Seminars

"The New Standing and Ripeness Doctrines: Who Can Challenge Public Lands Decisions, and When?", 45

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Carver Schwarz McNab Kamper & Forbes, LLC

1888 Sherman Street - Suite 400Denver, Colorado 80203Telephone: (303) 893-1815 • Fax: (303) 893-1829Map and Directions • E-Mail the Firm

Rocky Mtn. Min. L. Inst., 1999"Natural Gas Price Indices: Do They Provide a Sound Basis for Sales and Royalty Payments?", 42 Rocky Mtn.Min.L. Inst., 1996Frequent Lecturer, Natural Resource Subjects, including Rocky Mountaining Mineral Law Foundation shortcourse on Federal Oil and Gas Leasing

Professional Associations and Memberships

Rocky Mountain Mineral Law Foundation, President, 2007 - 2008Rocky Mountain Mineral Law Foundation, Vice President, 2006 - 2007Denver Bar Association, MemberColorado Bar Association, MemberAmerican Bar Association, MemberRocky Mountain Mineral Law Foundation, Treasurer, 2002 - 2004

Past Employment Positions

Carver & Kirchhoff, LLC, Partner, 2003Alfers & Carver, LLC, Partner, 1996 - 2002Gibson, Dunn & Crutcher, Partner, 1982 - 1996Head, Moye, Carver & Ray, Partner, 1976 - 1982

Copyright © 2018 by Carver Schwarz McNab Kamper & Forbes, LLC. All rights reserved. Disclaimer | SiteMap

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EXHIBIT B

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GEOFFREY HEATH

Highlights from Curriculum Vitae

Most recent position:

Senior Attorney (retired July 2015) Division of Mineral Resources Office of the Solicitor U.S. Department of the Interior 1849 C St., N.W. Washington, D.C. 20240

Served for more than 31 years in the Department of the Interior, as:

Senior Attorney, Off ice of the Solicitor, Division of Mineral Resources (July 2010 – July 2015) Administrative Judge, Interior Board of Land Appeals (October 2007 – July 2010) Assistant Solicitor for Federal and Indian Royalty (May 2006 – October 2007) Assistant Solicitor for Royalty and Offshore Minerals (October 1997 – May 2006) Attorney, Division of Mineral Resources and Division of Energy and Resources (November 1983 – October 1997)

I. ADJUDICATIVE EXPERIENCE

• Principal author of 45 final decisions of the Interior Board of Land Appeals (IBLA) aslead judge involving wide range of issues including:

◦ Federal oil and gas leasing (compliance with National Environmental Policy ActNEPA) and related requirements, royalty on production used as fuel, leasesuspensions, bonding, and leasing procedures)

◦ Offshore oil and gas lease suspensions

◦ Federal mining law (mining claim contests, claim and millsite occupancy, claimvalidity, and title issues)

◦ Solid minerals (solid mineral lease renewal, mineral material sales contracts, andmineral material trespass)

◦ Federal geothermal resources leasing (NEPA requirements and compulsoryunitization)

◦ Federal land conveyances and exchanges (patent corrections, NEPA requirements,and Alaska Native allotments)

◦ Rights-of-way over Federal lands (right-of-way grants, NEPA requirements, etc.)

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◦ Grazing (allotment closures, grazing level adjustments, grazing trespass, and

unauthorized uses)

• Contributing author or editor as panelist (second judge) in more than 40 final decisions. In addition to issues similar to those identified above, these cases involved land survey disputes, split estate issues, unitization of oil and gas leases, royalty on coal mine vent gas, National Historic Preservation Act requirements, color of title claims, surface mine operating permits and reclamation, and the Equal Access to Justice Act,

• Reviewed over 440 decisions and orders in internal circulation involving broad range of

issues, contributing comments and changes as appropriate. II. RULEMAKING EXPERIENCE • Solicitor’s Office member of BLM teams writing proposed rules (including proposed regulatory

text, preambles, economic analyses, and environmental assessments) to revise or replace BLM Onshore Oil and Gas Orders 3, 4, and 5, as well as NTL-4A, serving as legal advisor and contributing author and editor over a period of almost 5 years (August 2010 – July 2015). Work included analysis of numerous legal issues, writing internal briefing memoranda and legal analyses, participation in public outreach meetings, analysis of comments, analysis of economic effects, etc.:

◦ Proposed 43 C.F.R. subparts 3170 and 3173 – site security/production accountability (to

replace Onshore Oil and Gas Order No. 3) ◦ Proposed 43 C.F.R. subpart 3174 – oil measurement (to replace Onshore Oil and Gas

Order No. 4) ◦ Proposed 43 C.F.R. subpart 3175 – gas measurement (to replace Onshore Oil and Gas

Order No. 5) ◦ Numerous drafts of proposed rule on waste prevention (gas flaring/venting) and royalty-

free fuel use gas (to replace Notice to Lessees and Operators of Federal Onshore Oil and Gas Leases No. 4A)

• Solicitor’s Office counsel and representative in writing other proposed rules for BLM onshore

lease operations:

◦ Proposed BLM royalty rate rule and advance notice of proposed rulemaking ◦ Royalty provisions of draft proposed BLM coal rule and oil shale rule

• Rewrite of Bureau of Ocean Energy Management (BOEM) regulations at 30 C.F.R. §§ 556.600

and 556.601 regarding initial period of offshore oil and gas leases and maintaining leases beyond the initial period

• Rewrite of provisions in BOEM final leasing regulations on record title owner and operating

rights owner liability, monetary and non-monetary obligations, and assignments of lease interests

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• Revision of immediately final rule promulgating correcting amendments to recodification of

former Minerals Management Service (MMS) royalty regulations to Office of Natural Resources Revenue (ONRR) regulations

• ONRR proposed rule to increase civil penalty amounts for inflation and apply civil penalties to

solid mineral and geothermal leases • Reviewed, revised, and edited numerous MMS proposed and final regulations involving

offshore leasing procedures, offshore exploration and production operations, environmental safeguards, offshore deep water royalty relief, and royalty valuation and management

• Served as one of the principal authors of proposed and final offshore deep gas royalty

relief rules, Federal crude oil royalty valuation rules, Federal gas royalty valuation rules, proposed Indian crude oil royalty valuation rules, proposed and final geothermal royalty valuation rules, and proposed and final rules governing administrative appeals from MMS orders

• Principal contributing author of proposed and final rules amending gas valuation

regulations to specify allowable transportation costs under FERC pipeline rate restructuring and to codify lessee’s duty to market production

• Principal author of proposed and final rules regarding —

◦ Offsets, recoupments, and refunds of overpayments of royalties and other payments under Federal offshore mineral leases.

◦ Offsetting incorrectly reported production between different Federal or Indian

leases. • Principal author of companion proposed rules regarding collection of royalties due under

Federal and Indian mineral leases by administrative offset and limitations on credit adjustments submitted by lessees under Federal and Indian mineral leases.

III. INTERPRETATIVE RULES/GENERAL STATEMENTS OF POLICY — NOTICES TO

LESSEES AND NATIONWIDE INSTRUCTION MEMORANDA • Reviewed and revised successive drafts and resolved legal issues for nationwide BLM Instruction

Memoranda (I.M.s) on:

◦ “Beneficial Use” (royalty-free use of gas in lease/unit operations) ◦ Commingling (I.M. 2013-152, July 3, 2013) ◦ Reinstatement of non-producing leases terminated for non-payment of rent ◦ Operating rights assignment adjudication (I.M. 2013-177, Aug. 13, 2013) ◦ Guidance on coordination in fulfilling requirements under National Environmental Policy

Act (NEPA) and National Historic preservation Act (NHPA) in leasing decisions

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• BSEE Notices to Lessees of Federal offshore leases (NTLs) on:

◦ Royalty-free fuel use gas (“beneficial use”) ◦ Flare/vent meter installations ◦ Flaring and venting approval requests ◦ Subsea pumping ◦ Inspection fees ◦ Gas measurement at gas processing plants ◦ Commingling Interim Policy Document

IV. LEGAL OPINIONS AND ADVICE Analyzed and advised BLM, BOEM, Bureau of Safety and Environmental Enforcement (BSEE), and MMS/ONRR on numerous legal issues, including the following selected examples from the most recent 5 years of Solicitor’s Office service: • Analysis of numerous issues involved in production of oil and gas from mixed Federal and non-

Federal mineral estate by horizontal or directional wells, including scope of Federal regulatory authority over production facilities located on non-Federal land, production allocation, communitization agreements and approvals, unitization agreements, production measurement, etc.

• Available remedies for unauthorized drilling and mineral trespass, and settlements of mineral

trespass claims for horizontal wells drilled by non-lessee into Federal mineral estate • Development of leased fractional Federal mineral interests • Numerous issues involved in royalty-free use of production in lease or unit operations; principal

author of Associate Solicitor’s opinion analyzing whether General Accountability Office (GAO) recommendation to require prior approval of royalty-free use is lawful

• Principal author of Associate Solicitor’s opinion clarifying scope of Departmental authority over

pipeline company-owned and gas plant tailgate meters • Relationship of approvals for off-lease measurement to royalty-free use of gas as fuel in

operations V. JUDICIAL AND ADMINISTRATIVE LITIGATION • As principal agency counsel for MMS, bore major responsibility in drafting, review, and

revision of briefs and preparing for argument in judicial cases involving —

◦ Royalty consequences of (1) Federal and Indian lessees’ duties to put production into marketable condition and to market production at no cost to the lessor; (2) gas contract settlements; and (3) sales between affiliates.

◦ Application of statutory deep water royalty relief provisions.

◦ Applicability of statute of limitations to claims for unpaid royalties.

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◦ Challenges to offshore oil and gas lease suspensions and asserting breach of contract with respect to offshore leases.

◦ Claims for alleged underpayment of royalty in several cases brought by private

relators under the qui tam provisions of the False Claims Act.

◦ Numerous other judicial cases involving a variety of disputes regarding royalty valuation of oil, gas, and coal production from Federal and Indian leases and related issues.

◦ At stake in these cases were hundreds of millions of dollars in Federal royalty

revenues. (After the Treasury Department, MMS is the largest collector of revenues for the United States.)

• Lead counsel in 13-day trial before administrative law judge involving complex

petroleum geology and legal questions related to producibility and expiration of certain offshore oil and gas leases

• Supervised briefing in numerous administrative cases before the Interior Board of Land

Appeals and DOI’s Office of Hearings and Appeals.