Facts and Information regarding the

Louisiana Oilfield Restoration Association d/b/a LORA Financial Security

LORA

 

Important facts and information regarding the Louisiana Oilfield Restoration Association d/b/a LORA Financial Security (“LORA”) include the following:

 

In response to the Department of Conservation and Energy – Orphan Well Pilot Program, Investigative Audit Services report, issued June 17, 2026 (the "2026 LLA Report"), by the Louisiana Legislative Auditor, the Louisiana Oilfield Restoration Association d/b/a LORA Financial Security (“LORA”) issued the following statement:

 

"LORA operated in full compliance with the applicable laws, regulations, and its contractual obligations. LORA voluntarily cooperated with the Louisiana Legislative Auditor’s investigation as a gesture of good faith and transparency even though, as a private company that never received or utilized any state or public funds, it was under no obligation to do so.

 

The [2026] LLA Report left out key facts LORA provided – including the contractual language that shows LORA acted at the request of the state, in accordance with its agreement and continually went above and beyond to provide transparency.

 

LORA has been out of business for more than a year.  LORA was required to cease all operations following DCE’s termination of its contract, including plugging operations underway at the time.

 

LORA is proud of the work it accomplished and the positive impact it had on its clients and the people of this State."

 

Additionally, Appendix B to the 2026 LLA Report on LORA includes a response written by LORA’s attorney to the report, with certain comments and suggestions addressing the 2026 LLA Report.  The text of that response, in part, is below:

 

"I am responding to the draft investigative audit report on the Department of Energy and Natural Resources – Office of Conservation that was forwarded to me by your office last month. I appreciate you sharing the draft. I am writing on behalf of Louisiana Oilfield Restoration Association, Inc. (LORA) with three comments and suggestions for the Legislative Auditor’s consideration before the report is put into its final form.

 

First, the report makes many references to the Cooperative Agreement between the Office of Conservation and LORA, including summarizing and offering interpretations of certain provisions. But the draft report does not attach a copy of the Cooperative Agreement itself. LORA encourages the Legislative Auditor to attach the Cooperative Agreement to the final report. Given that the Cooperative Agreement governed the contractual relationship between Conservation and LORA from beginning to end, a report about that relationship is incomplete without a copy of that document for the public and interested parties to review and interpret. The Cooperative Agreement is only 12 pages long, including four pages with nothing but signatures. Including the Cooperative Agreement itself will also help to clarify that LORA’s entire

operation, from beginning to end, was funded completely by private oil-and-gas operators who paid financial security fees in amounts set by Conservation and state law. LORA did not receive state funding and did not have any control over the rates that it could charge customers for financial security.

 

Second, regarding Commissioner Ieyoub’s interview and selection process for who would run the private non-governmental entity that he envisioned that would provide more affordable financial security, the draft report states that Commissioner Ieyoub interviewed three individuals and ultimately chose Mr. Van Mayhall III to form and run the entity that was ultimately organized as LORA. As you likely know, Commissioner Ieyoub initially approached traditional providers of financial security and an oil-and-gas trade association about running the organization that he envisioned, and that he could not find any traditional provider or trade association willing to take on that responsibility. After finding no takers among those entities, Commissioner Ieyoub began reaching out to state agencies and other sources for recommendations of individuals who might be able to implement his vision for a to-be-created organization. Commissioner Ieyoub received multiple recommendations to consider Mr. Mayhall, including from the Louisiana Department of Insurance based on its positive experiences with Mr. Mayhall when he represented private organizations working in alignment with the State’s interests in the insurance context. LORA believes that additional explanation about Commissioner Ieyoub’s work to find someone to run a to-be-organized entity that he wanted to be formed for the implementation of his vision, and how he came to select Mr. Mayhall for that role, is important context for the report. (But for Mr. Ieyoub’s unfortunate passing, he would be able to offer his interpretation of the Cooperative Agreement and possibly resolve the pending disputes between LORA and Conservation.)

 

Finally, the report references Conservation’s termination of the Cooperative Agreement and request that LORA remit funds in the Reserve Account. For the sake of completeness, the report should also state that LORA complied with the termination notice, terminated its operations (including ongoing well-plugging operations at the Poydras wells per Conservation’s specific demand), and wired $5,000,000 from its Reserve Account to Conservation. LORA believes that the report could include additional facts relevant to the subject matter of the report, including without limitation the positive effects that LORA had on the oil-and-gas industry in Louisiana, including keeping many operators in business while simultaneously plugging well over 100 orphaned wells."

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Further. Appendix C to the 2026 LLA Report on LORA includes Johnny Adams’ response from his attorney Steven J. Moore, which suggests that the Report includes “misstated facts” that are believed to be “unfounded, misleading, or completely inaccurate conclusions” and then the letter seeks “to set the record straight” with a number of facts and assertions that challenge the “inaccurate narrative” in the 2026 LLA Report.  Any analysis of the 2026 LLA Report and LORA should include a review of that response.  That response is available on pages C.1 – C.6 of the 2026 LLA Report.

 

Important information and background about the Louisiana Oilfield Restoration Association d/b/a LORA Financial Security or LORA include the following: 

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Background: The Orphan Well Issue in Louisiana

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• Going back more than a decade, the orphan well issue has been a significant concern for the State of Louisiana.

• The Louisiana Legislative Auditor (“LLA”) found in its Regulation of Oil and Gas Wells and Management of Orphan Wells, Louisiana Legislative Auditor, Performance Audit issued May 28, 2014 (the “2014 LLA Report”) that the Office of Conservation (“OOC”) "has not always effectively managed the current orphaned well population" and was "unable to reduce the total population of orphaned wells."[1]

• The 2014 LLA Report suggested the Louisiana Legislature should "consider increasing funding or identifying additional sources of funding to address and reduce the state's current population of orphan wells."[2]

• As of 2013, "there were 2,836 known orphaned wells in Louisiana," and the number of wells plugged each fiscal year "decreased to an average of 33 wells from fiscal years 2011 through 2013."[3]

• The 2014 LLA Report suggested that "increasing production fees and identifying other sources of funds would generate additional funds to help reduce the current population of orphaned wells."[4]

• The LLA again emphasized that "additional sources of revenue for the OSR Fund" was a priority.[5]

 

Early Response: Pilot Program

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• In 2016, then-Commissioner James H. Welsh and his staff put together a pilot program known as LOPAC that was the forerunner of LORA.

• LOPAC was only operational for a few weeks before former Commissioner Richard Ieyoub was appointed.

• Commissioner Ieyoub halted all of the ongoing Commissioner Welsh programs, including LOPAC.

 

Continued Pressure: 2016–2018

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• From 2016 through 2018, Commissioner Ieyoub and his staff were under increasing pressure to resolve the ongoing orphan well issue.

• Senate Concurrent Resolution (SCR) 89 of the 2015 Legislative Session formed a task force to address the issues outlined in the 2014 LLA Report.

• Numerous concerns and issues were presented and discussed by various stakeholders at the SCR 89 Task Force meetings, including the LLA's recommendation that "additional sources of revenue" be found for the OSR Fund.[6]

• OOC staff held several public meetings across the State of Louisiana to maintain an open dialogue with operators, during which operators repeatedly emphasized:

  • The premiums for the required financial security were prohibitively expensive and in some areas completely unavailable.

  • The cost to the OSR Program to plug wells was significantly greater — specifically, three to four times greater — than operators' cost to plug wells.

  • As a result of the state bid law requirements, operators capable of plugging wells in compliance with Conservation regulations do not qualify to bid on OSR packages.[7]

 

The 2018 OOC Report

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• Commissioner Ieyoub and his staff issued the Report on Oil and Gas Wells and Management of Orphan Wells, Prepared for the Office of the Governor, John Bel Edwards by the Office of Conservation, on July 31, 2018 (the "OOC Report").

• As of July 31, 2018, "3,633 orphaned oilfield sites remain on the orphaned oilfield site list."

• "The number of orphaned wells has increased over the past five years, even with the large number of wells that have been plugged, as more wells have been orphaned during this time period than have been plugged or otherwise removed."[8]

• The aggregate premiums for financial security paid by Louisiana oil and gas operators was about $22,600,000 annually.

• "The average amount of financial security collected each year is about two hundred thousand dollars."

• The OOC Report recognized that requiring "industry to pay annual premiums of twenty-two point six million ($22,600,000) seems excessive for an annual two hundred thousand ($200,000) return."[9]

 

Key Points Identified in 2018

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• The number of orphan wells on the orphan well list continued to grow.

• The suggestion to find additional funding sources to plug orphan wells.

• The difficulty of certain Louisiana oil and gas well operators to obtain affordable (or even any) financial security.

• The estimated $22 million or more spent by the industry in financial security premiums versus annual collections of roughly $200,000 in financial security payments.

 

The Proposed Solution: Creation of a Public-Private Partnership

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• The OOC developed a solution intended to:

  • Provide financial security for operators struggling to find it.

  • Use private, industry dollars to properly plug and abandon orphan wells in the State of Louisiana.

• The OOC Report provided five (5) separate proposals, including the creation of a non-governmental organization (NGO) to supplement the OOC's Oilfield Site Restoration ("OSR") program.[10]

• The proposed public-private partnership solution was "to establish a not for profit, non-government organization (NGO) that would perform the same tasks as the OSR program, simultaneous to and as a supplement to the current OSR program, but as [an] NGO, it would not be subject to the state bid laws and could hire small local operators to perform the work."[11]

• The NGO program would "allow for operators drilling or acquiring new wells to pay their premiums to the NGO, who will then use them to pay local operators to plug wells."

• One advantage: "the money that otherwise goes in the form of premiums to out of state banks would remain in Louisiana and would be paid directly to 'mom and pop' operators who need it the most."

• Another advantage: as an NGO, "small operators that would otherwise be disqualified under the state bid laws would be available for participation."

• "Since more operators would be available to bid on the work, the competition would drive prices down significantly lower than what the OSR can entice."[12]

• As "an incentive to encourage participation," the OOC Report determined that "the required premium contributions could be set at the low end of the current industry average of three to seven percent."[13]

• The OOC Report found that this program "could be implemented by the Commissioner with no additional rules or Legislation" and "should be set up so that the Commissioner has complete authority to review the funding and expenditures at any time."[14]

 

Attempts to Establish the Public-Private Partnership

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• The OOC initially approached an oil-and-gas trade association about running the public-private partnership that the Commissioner envisioned.

• OOC also reached out to at least one traditional provider of financial security regarding the operation of the public-private solution.

• Having no success finding a traditional provider or trade association willing to take on that responsibility, OOC began reaching out to state agencies and other sources for recommendations of individuals who might be able to implement the Commissioner’s vision for a to-be-created organization.

• Commissioner Ieyoub received multiple recommendations to consider Van R. Mayhall, III, including from the Louisiana Department of Insurance based on its positive experiences with Mr. Mayhall when he represented similar public-private partnerships working in alignment with the State’s interests in the insurance context.

• The Moore response to the 2026 LLA Report indicated that one of the other attorneys at OOC stated unequivocally that it was he, not Johnny Adams, that offered Mr. Mayhall’s name to the Commissioner, based on that individual’s knowledge of Mr. Mayhall and his experience.

• The OOC seems to have developed a list of a number of names from different backgrounds and different sources.

• Commissioner Ieyoub solely selected the candidates whose resumes he wanted to review and whom he eventually chose to interview.

• Commissioner Ieyoub and then-Assistant Commissioner Gary Ross were the only ones involved in the interviews and were solely involved in the discussion as to which candidate to select.[15]

 

Creation of LORA

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• The OOC Report proposing the NGO solution was issued in July of 2018.

• More than a year later, the Commissioner and Assistant Commissioner Ross began interviewing candidates to run the proposed NGO.

• In the fall of 2019, Commissioner Ieyoub selected Mr. Mayhall to establish and manage the public-private partnership solution to the orphan well problem, which eventually became LORA.

• The OOC drafted a Cooperative Agreement  (the “CA”) between the OOC and LORA, which was executed and effective in November of 2019.

• LORA began financial security operations shortly thereafter.

• In its 2020 Progress Report, the LLA noted that the OOC had entered into a Cooperative Agreement, establishing LORA as the NGO to provide financial security for operators and to supplement the OSR in plugging orphan wells.[16]

 

LORA Operations

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• The Cooperative Agreement clearly contemplates a two-phase operation. 

• In Phase One of the operation:

  • 20% of the fees LORA collected for providing financial security to Louisiana oil and gas well operators were allocated to administrative fees to establish and operate the financial security operations of LORA; and

  • 80% of the fees (the “Operating and Reserve Funds” under the Cooperative Agreement) were allocated to a reserve until the reserve reached $5 million, at which time the second phase would begin.

• After the reserve reached $5 million, Phase Two of LORA’s operations began, according to the Cooperative Agreement:

  • LORA was required to spend 80% of the Operating and Reserve Funds, equaling 64% of the fees collected from the financial security operations, to plug orphan wells;[17]

  • The remaining 36% of the fees were allocated to administrative expenses to staff, manage and operate two distinct lines of business: its financial security operations and its orphan well plugging operations.

• All administrative, staffing and operational expenses of LORA were required to be paid from the 36% of annual fees it collected based on an annual rate established by the Cooperative Agreement.

• Thereafter, 64% of the gross revenue LORA received in fees was dedicated to plugging and abandoning orphaned wells on a annual basis – this was the continuing orphan well plugging program managed and operated by LORA.

• The Cooperative Agreement expressly states that the division of the financial security fees thereunder “is not applicable to any other assets, income, fees or expenses generated or collected by LORA, its operations or investments.”[18]

 

LORA Plugging Successes

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• LORA reached the $5 million reserve on June 28, 2022, and the reserve was maintained at or above that level.[19]

• LORA's first year of plugging operations was from June 28, 2022 through December 31, 2022.

• During that time, LORA received $3,807,098.03 in gross annual security fees from operators.

• Pursuant to the Cooperative Agreement, LORA was required to spend 64% of those gross dollars to plug orphan wells.

• For FY 2022, LORA expended $2,436,542.74 to plug and abandon (P&A) eighty-eight (88) orphan wells in Louisiana.

  • Only 22 of those wells were from former LORA clients; the other 66 were directly from the OSR orphan well list.

• The OSR's average annual expenditure from FY 13/14 through FY 21/22 was estimated to be $5,069,482.42 to plug an average of 113 wells annually.[20]

• The OSR expended an estimated $4,083,832.50 in FY 21/22 to plug 82 wells.[21]

• The LORA numbers and the OSR numbers cannot be directly compared, as the OSR was more than likely plugging more costly wells with significant and expensive hazards to address.

• Nevertheless, this shows that LORA was fulfilling its role as a supplement to the OSR.

 

An Example of LORA’s Benefit to the State: The Hawkeye Wells

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• LORA provided Hawkeye Drilling Co. ("Hawkeye") with financial security in the amount of $50,000.00 to cover seven (7) wells on an up-to-ten well blanket.

• Hawkeye was orphaned by the OOC, and LORA reached out to local Louisiana contractors to get bids on plugging the wells.

• The OOC indicated there was another orphan well (not previously covered by LORA) in the same vicinity and asked that LORA plug this well as part of the project.

• LORA determined that it would cost approximately $200,000.00 to properly P&A all eight (8) wells.

• Any other financial security provider would have written a check to the OOC for $50,000.00 and left the OOC and Louisiana taxpayers to cover the remaining $150,000.00 (or more).

• LORA used a part of its annual P&A budget to spend the roughly $203,000.00 that it ultimately cost to plug the wells.

• All eight (8) of the Hawkeye wells were properly plugged and abandoned in a timely manner by LORA.

 

LORA Reporting

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• LORA provided the OOC with an Annual Report each year of its operation.

• With respect to each oil and gas well operator for which LORA provided financial security, LORA submitted a detailed list of each well (when available) and the amount of financial security provided to the OOC.

• The OOC reviewed and approved each financial security instrument that LORA entered into, and as such, the OOC was aware exactly how much financial security had outstanding at any one time during its operation.

• The OOC reviewed and approved the plugging procedures for each well that LORA plugged prior to plugging.

• The OOC is the regulatory body which formally declares wells orphaned; thus, the OOC was aware at all times which wells covered by LORA financial security had been orphaned.

• The OOC examined and approved each final well site after LORA’s contractors plugged an orphan well.

• The OOC was aware exactly which wells, and in what order, that LORA was plugging throughout the entirety of its operation.

• LORA plugged 57 total wells in calendar year 2022 and 52 total wells in calendar year 2023; LORA plugged more than 50 wells in 2024 and was in the middle of ongoing plugging operations when the OOC shut it down in 2025.

• LORA provided the OOC with an annual plugging and abandonment (“P&A”) budget report with more information regarding well plugging operations.

• The FY 2022 report showed that LORA plugged 88 wells under the 2022 P&A budget. LORA plugged all wells using Louisiana contractors using private funds, without the use of any public funds and at no cost to the State or its taxpayers.

 

LORA and the LLA

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• LORA met with the Louisiana Legislative Auditor (“LLA”) on more than one occasion in connection with the LLA's audit of orphan wells in Louisiana.

• Although LORA was not subject to the LLA’s authority under the law, LORA voluntarily provided the LLA with extensive information and documentation regarding LORA and its operations.

• LORA made it clear to OOC that LORA was open to amending the Cooperative Agreement to authorize audits of LORA by the LLA – LORA’s only stipulation was that LORA should not bear the cost of such an audit.[22]

 

Conclusion

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• LORA was a public-private partnership created and operated according to the guidelines and requirements laid out by the OOC in the Cooperative Agreement.

• LORA is out of business and has been out of business since the Cooperative Agreement was terminated by OOC on May 2, 2025. 

• LORA was actively fulfilling its duties under the Cooperative Agreement, with ongoing plugging and abandonment operations on orphan wells on May 2, 2025, and OOC unilaterally shut down all such operations on that date.

• LORA was entirely funded using private dollars, and all of its plugging operations were funded by private dollars. 

• LORA did not receive or use state or public funds. 

• Although LORA entered into a contract with OOC as a private company, LORA was never a state agency or an instrumentality thereof. 

 

 

 

 

 

 

 

 

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[1] Regulation of Oil and Gas Wells and Management of Orphan Wells, Louisiana Legislative Auditor, Performance Audit issued May 28, 2014, page 2.

[2] Id.

[3] Id., pages 2, 23.

[4] Id., page 30.

[5] Id., page 33.

[6] Report on Oil and Gas Wells and Management of Orphan Wells, Prepared for the Office of the Governor, John Bel Edwards by the Office of Conservation, Richard Ieyoub, Office of Conservation, July 31, 2018, pages 13-14, 20.

[7] Id., pages 27-28.

[8] Id., page 8.

[9] Id., page 26. Note that the $200,000 figure refers only to the amounts collected from financial security providers on financial security obligations for orphan wells.

[10] Id., pages 23, 27.

[11] Id., page 28.

[12] Id., page 28-29.

[13] Id., page 29. Note that LORA was capped at a maximum 3.5% annual fee under its Cooperative Agreement with the OOC.

[14] Id. Page 29.

[15] See the Moore response to 2026 LLA Report, Appendix C, pages C.1 – C.6.

[16] Progress Report: Regulation of Oil and Gas Wells and Management of Orphaned Wells, Office of Conservation,
Department of Natural Resources, Louisiana Legislative Auditor, Performance Audit issued March 11, 2020, page 17.

[17] Cooperative Agreement 20-004, page 3.

[18] Cooperative Agreement 20-004, page 4.

[19] Until LORA wired $5 million to OOC after OOC unilaterally terminated LORA’s contract in May of 2025.

[20] This average annual expenditure seems to be the basis that the OOC used to set the LORA reserve at $5,000,000.00.

[21] These OSR numbers were provided by a third-party researcher based on publicly available information.

[22] LORA never had any objection to being subject to the LLA audit authority; however, LORA rejects the suggestions of the previous OOC administration that LORA was at any time "out of compliance" because the Cooperative Agreement did not include such a provision.  LA. R.S. 30:4(T) is not retroactive and thus did not expressly apply to LORA.

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