AAPL STAFF REPORT
AAPL currently has 29 people on staff with 5 vacant positions, being a Senior Accountant, Personify Database Administrator, Electronic Media Administrator, Business Development Manager, and Publications/Marketing Manager.
Amanda Johnson, CPA, was the successful candidate to fill the AAPL Controller role vacated by Alan Kottler, who retired on July 1, 2016. Ms. Johnson previously held the position of Senior Accountant for AAPL, leaving that position currently vacant.
AAPL membership was 13,588 and continuing. This level represents approximately 75% of the membership level as of June 30, 2016. The certification status of eligible members is 2,729 (51%) CPL, 2,130 (39%) RPL, 492 (9%) RL, and 58 (1%) Retired CPL.
The final financial tabulations have not yet been completed; however, attendance was down 36% from last year’s event.
Denver NAPE has been moved up to October this year from its normal December dates.
The AIPN (Association of International Petroleum Negotiators) and the AAPL OCS (Outer Continental Shelf) Advisory Board have agreed to hold their respective annual winter workshop and annual meeting during the week of NAPE. These moves are anticipated to encourage more NAPE attendance by their members. Registration is currently open. General Colin Powell will keynote the NAPE Charities Luncheon. The NAPE Charities Fund is changing to NAPE Expo Charities Fund, a public charity.
ANNUAL MEETING – 2016, ORLANDO, FL
AAPL held its 2016 Annual Meeting in Orlando this past June, which was attended by 184 members. Due to the very low attendance, registration income was down 74% vs. Budget. Staff worked to decrease expenses by 22% vs. Budget, but was hampered by fixed overhead rates contracted in 2014. The result was a realized loff of $554,000.
ANNUAL MEETING – 2017, SEATTLE, WA
AAPL will hold held its 2017 Annual Meeting in Seattle next June. Given the negative fiscal impact of the 2016 Annual Meeting due to low attendance, AAPL has renegotiated its hotel contract to limit our exposure, reducing the guarantee from 750 members attending to 300 members. Registration for the Seattle Annual Meeting will open earlier this year. There will also be some programmatic changes, potentially to the education schedule and the evening events. Our own Taylor Hess now serves on the Annual Meeting Committee.
The new AAPL Contract Center is shooting for a functional date of October 1, 2016. The Contract Center will be where the new 2015 JOA can be accessed, modified, negotiated and saved. Forms-on-a-Disk will no longer sell the AAPL JOA format, though your current applications for the 1982 and 1989 versions will still be available. Once operational, the Contract Center will add additional documents to its library.
The Personify New Member Join was implemented in August and the Personify On-line Certification is being tested with a 3Q release anticipated.
The AAPL mobile app is now available to download and includes details for all education and member services. It can be downloaded from your phone’s app center.
Understanding the current economic state of our industry, AAPL is working to develop and deliver an effective, but cost effective and affordable, educational offering to the members. AAPL members can work online education classes through the AAPL website at a cost of $10/credit. Following is a link for more information: https://personify.landman.org/personifyebusiness/Education/OnlineCourses.aspx.
Additionally, the previous Executive Committee, led by Marc Strahn, has directed AAPL to develop a new initiative that would provide volunteer speakers on a regional basis for AAPL sponsored workshops and seminars, beginning FY17-18. While this moves away from compensated presenters, AAPL is looking for cost-savings and the realization of some of the following benefits: greater opportunity for members to contribute as presenters, the content material will be owned and approved by AAPL, allows a regional flavor to better reflect the attendees, and allow for regionally specific certification programs. All such programs will be recorded and made available online to members. AAPL staff will conduct a ‘Call for Speakers’ in the coming year.
Since the June Board meeting, AAPL has held 14 seminars with 398 attendees. Again, these will be made available to the membership online.
There are currently 4 regional land institutes planned for this Fall, with registration being open: Santa Fe Land, in Santa Fe, NM on 9-16-16; Texas Land in Houston, TX on 9-26-16; Appalachian Land in Washington, PA on 10-6-16; and Gulf Coast Land in New Orleans, LA on 10-27-16.
This board meeting spent a great deal of time reviewing the financial statement and budget of the previous board (‘15-‘16). Revenues are anticipated to continue to decrease, while operating expenses appear to flatline or even increase. AAPL, as an organization, maintains a solid reserve position and should be able to withstand the downturn. The focus remains on how to hold or reduce expenses, increase revenues and maintain member services. I anticipate there will be more future discussion regarding a strategic approach to budgeting, reserve spending and organizational goals.
As compared to June 30, 2015, total assets have decreased from $35,543,394 to $30,842,103, representing a decrease of $4,701,291 or 13.2%. The primary reasons for the decrease include retiring $1,338,651 on the new building loan, net transfers of $2,330,000 to the operating account for day-to-day expenses (of which $1,000,000 was used to pay off the building loan), and decline of $378,882 in the market value of investments.
As compared to June 30, 2015, revenues (exclusive of investment revenues) have decreased 20.1% from $8,808,361 to $7,041,138. The decrease is due in large part to the education program’s 50% reduced tuition, resulting in a revenue decrease of $349,366; a $705,006 (39.9%) decrease in NAPE distributions and management fee income; elimination of recertification fees ($95,995); a reduction in earned dues income of $183,139; and decreased annual meeting attendance. Expenses have decreased 2.7% from $9,178,168 to $8,930,847. The net ordinary income (loss) for the 12 months changed from $(369,807) to $(1,889,708), as a primary result of the loss on the annual meeting and other non-budgeted expenses, such as the settlement of lawsuits.
Investments decreased by $4,047,533 (14.4%) over the same period, due to the retirement of the building debt, operational fund transfers and investment losses. The year-end balance was $24,098,738.
JOINT OPERATING AGREEMENT FORM 810-2015
AAPL should be releasing the new JOA form very soon. It will be offered through AAPL directly on the website, instead of Forms-on-a-Disk as in the past. AAPL will also be offering a bank of forms (Oil and Gas Leases, Farmout Agreements, etc.) through its website and will be getting away from Forms-On-A-Disk.
The federal and state departments of labor continue to seek out and audit companies and individuals regarding their independent contractor status. Pennsylvania seems to be under attack by the National Labor Relations Board for the misclassification of employees. The Department of Labor’s stance is that workers are considered employees unless proven otherwise. IF YOU CONSIDER YOURSELF AN INDEPENDENT CONTRACTOR, OR YOU HAVE INDEPENDENT CONTRACTORS PERFORM LANDWORK FOR YOU, I STRONGLY ADVISE YOU TO CHECK OUT AAPL’S INDEPENDENT CONTRACTOR TOOLKIT, available on AAPL’s website (www.landman.org). This toolkit contains important information and resources on how you should position yourself or your company in order to help you prepare if you face an audit, and a guide to Kansas tax and independent contractor regulations.
AAPL’s purpose is to serve its membership through continuing education, providing resources for you and/or your business, and a vast network of oil and gas industry professionals. If you are not already a member of AAPL, please consider joining. The benefits of membership in this good and strong organization are well worth the price of membership.
If you would like more details about anything discussed herein, or about AAPL in general, please don’t hesitate to contact me.
Michael A. Pisciotte, CPL
AAPL Director – Region VI