The Kansas Oil and Gas Resources Fund was created by the Kansas petroleum education and marketing act (K.S.A. 2006 Supp. 55-1625 through 55-1635, and amendments thereto). The act created a non-governmental entity to collect and disseminate funds for its defined purposes. The funds are to be collected through an assessment on the working interest share of oil and gas leasehold interests by the first purchasers. Royalty and overriding royalty interests are exempt from the assessment. The assessment is 0.05 per cent, or 0.0005, of the working interest revenue share.

Public image has been cited by opinion polls and national studies as the number one problem facing the American oil and gas industry. The Kansas oil and gas industry has the rare opportunity to reposition ourselves from the largely defensive and reactive posture of the past quarter-century into a positive proactive, and forward-looking force. Better energy education is of critical importance to the state of Kansas and the Kansas oil and gas industry in meeting future energy challenges. The Kansas Oil & Gas Resources Fund will make a positive difference for the Kansas oil and gas industry by providing a better public understanding of the energy challenges facing our state and nation. Your participation in this program is an important success driver.

The first assessments to be withheld and remitted to the Fund shall be collected for the production period beginning January 1, 2008. Funds collected from the assessment on January 2008, production will be due on or before March 31st, 2008.

The act calls for the first purchasers to collect the assessment and to remit it to the Kansas Oil and Gas Resources Fund, Inc., (Tax ID No. 26-0750621). Assessments may be accumulated until such time as they reach fifty ($50.00) dollars. Assessments less than fifty ($50.00) dollars may be submitted annually. Assessments are to be paid monthly, no later than sixty days after the close of the month of production. For example, assessments collected from March production would be due on or before May 31st.

Interest owners are to be notified of the subject of the assessment and that additional questions regarding the assessment can be answered by contacting the Kansas Oil and Gas Resources Fund, Inc. The assessment is voluntary in that an interest owner may obtain a refund plus interest from the Kansas Oil and Gas Recources Fund, Inc. annually.

First purchasers who remit one hundred percent of the revenue to the producers or operators will be required to collect and remit the assessment on the total working interest share paid to the operator, provided that the operator provides the total working interest share on each subject lease to the first purchaser. Failure by the producer or operator to provide the total working interest share to the first purchaser on leaseholds subject to the assessment will relieve the first purchaser of liability from collecting the assessment from such producer or operator upon written notice by the first purchaser. The first purchaser shall give written notice to the Fund, providing the name, address and contact information for the producer or operator as well as the lease name and Kansas Department of Revenue lease identification number.

This additional information is provided to help first purchaser comply with the act. Additional questions should be directed to:

Kansas Oil and Gas Resources Fund, Inc.
P.O. Box 757
Wichita, KS 67201-0757
316-771-7167