Natural Gas and Petroleum Emerging Technologies
Program Opportunity Notice (PON) No. 560-00

$250,000 AVAILABLE FOR PROJECTS

FIRST ROUND PROPOSALS DUE: Tuesday, January 16, 2001 3:00 pm*

Program Summary. NYSERDA announces the Natural Gas and Petroleum Emerging Resources Program to expand upstream investment in New York State by identifying new exploration targets. Selected projects will apply advanced technology and/or geological analysis to target high potential but less-explored formations. This program will specifically target five primarily gas-bearing formations: Devonian and Ordovician shales, Trenton/Black River groups, the Beekmantown formation, the Herkimer/Oneida formations, and the Cambrian Theresa/Potsdam sandstones, and one oil- and gas- bearing group: the Upper Devonian sands. Other formations will be considered with geologic support.

Technical Proposals. Full proposals can be submitted by individual companies or teams. Teaming arrangements among exploration, production, and technology development firms are encouraged, including the use of outside technical expertise or joint ventures between companies/organizations. Teams are not required to have New York State production or leases; however, to be eligible for an award, proposals must include a New York State development site.

You are invited to submit a proposal in accordance with the requirements of this solicitation. Work is expected to begin in the Spring, 2001. Maximum available funding is $75,000 for Type 1 projects and $100,000 for Type 2 projects (see instructions for definitions). Total program funding is $250,000. NYSERDA will fund up to 50% of the project cost and may take a production interest.

To respond to this PON, submit by mail 8 copies of your proposal by Tuesday, January 16, 2001, 3 p.m. to:

Karen Whalen, PON No. 560-00
NYS Energy Research and Development Authority
17 Columbia Circle
Albany, New York 12203-6399

TECHNICAL questions may be directed to John Martin (518-862-1090, ext. 3265, or jpm@nyserda.org). Contractual questions may be directed to Elsie Beagle (518-862-1090, extension 3261)

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* Late proposals will be returned unopened. If funding is available, a second proposal cycle will occur in May, 2001.

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I. INTRODUCTION

The application of new technology has sparked new interest in older producing areas. From the evidence provided by recent exploration and drilling activity, it is clear that the future of New York State’s oil and gas industry will be in lesser explored or passed-over horizons. To develop new plays, integrated exploration projects are required that will help develop high-potential reservoirs.

NYSERDA’s Indigenous Resources subprogram targets the application of advanced technology to identify new resources, improve exploration success, reduce the cost of drilling, enhance production, and increase the overall productivity of New York State’s oil and gas industry. NYSERDA’s role in these projects is to work with the industry to reduce the risk associated with using new technologies and ideas for target exploration and reserve development.

II.PROGRAM OBJECTIVES

The Natural Gas and Petroleum Emerging Resources Program is designed to expand upstream investment in New York State by identifying new exploration targets. Selected projects will apply advanced technology and/or geological analysis to target high-potential but less-explored formations.

This program will specifically target five primarily gas-bearing formations: Devonian and Ordovician shales, Trenton/Black River groups, the Beekmantown formation, the Herkimer/Oneida formations, and the Cambrian Theresa/Potsdam sandstones, and one oil- and gas-bearing group: the Upper Devonian sands. Other formations will be considered with geologic support.

ELIGIBLE PROJECT TYPES

III. PROPOSAL CONDITIONS

Maximum available funding is $75,000 for each Type 1 projects and $100,000 for each Type 2 or combined project. Proposed projects must meet the following minimum requirements to be considered for funding:

LIMITATIONS

IV. PROPOSAL REQUIREMENTS

A completed Proposal Checklist must be attached to the front of all copies of the Technical Proposal. Proposers must submit eight (8) copies of the complete proposal and include the following elements:

Part I. Technical Proposal

Target Profile - State the target location, the target formation(s), and the companies involved in the development effort. Explain why the target is relevant to the future development of resources in New York State. For Type 2 projects, target delineation must be specific for consideration as an area of mutual interest. A map defining a specific area may be included.

Background/Approach - Briefly describe your approach to the project. Describe the overall exploration plan and how it can be applied to this prospect and New York State’s industry. Justify the rationale behind your technical approach. Include a discussion of the anticipated benefits to New York State and why the approach may be innovative. Identify whether the project is a Type 1 characterization study or a Type 2 development project.

Statement of Work - The Statement of Work (SOW) is the primary contractual document that enables you to get paid. It should be no more than seven (7) pages long. It is an action document that specifically delineates each step or procedure required to accomplish the project objectives. Therefore, each action shall be identified, indicating who will perform it, how it will be performed and its intended result. Strive to be clear and specific; concentrate on "how" and not "why." Use "active voice" sentence structure to make clear who is responsible for specific actions; for example, use the following phrase to start the description of every task and subtask: "The Contractor shall ...."

The SOW must be structured as an ordered set of tasks. In the following shell, tasks explicitly written out in non-italics must be included in your proposed statement of work. Text in brackets and italics are guidance statements.

Task 1.Project Management

Subtask 1.1: Project Management. The Contractor shall enter into the following agreements: [list any known subcontractors required to complete the project.] 1) Subcontract with [Subcontractor name]; 2) Subcontract with [Subcontractor name]; ...

Subtask 1.2: New York State Department of Environmental Consdrvation Regulations ("NYSDEC"). The Contractor shall abide by all NYSDEC regulations for mineral resource extraction.

Subtask 1.3: Meetings. [Describe any meetings required to complete the project and include participants.]

Task 2.Task Reporting
[All projects require monthly reports and a final report to be used as the basis for information dissemination activities.]

Subtask 2.1: Monthly Progress Reports. [All projects require monthly reports. Use this language.] The Contractor shall provide to NYSERDA once each month during the period the work is performed hereunder brief progress reports describing the work performed during the reporting period. Such reports shall describe any difficulties encountered during the reporting period and shall include a statement of the Project Director setting forth the cost of the work during the reporting period. The progress reports should be submitted to NYSERDA’s Project Manager no later than the 15th of each month. Progress reports shall be in a letter format and shall include the following subjects in the order indicated, with appropriate explanation and discussion.

a. Title of project.
b. Agreement number.
c. Period of this report.
d. Progress of report.
e. Planned progress in the future.
f. Identification of problems.
g. Planned solutions.
h. Ability to meet schedule, reasons for slippage in schedule
i. Schedule - percentage completed and projected percentage of completion of performance by months - could be a bar chart or milestone chart.
j. Analysis of actual cost incurred in relation to the budget.

Subtask 2.2: Final Report / Prospect Bid Package. [The Final Report will take the form of a prospect bid package and should include a brief description of the prospect, any analyses, an estimate of the hydrocarbon potential, and any geologic maps and cross section. Text should be no more than ten to fifteen (10-15) pages long (excluding executive summary, references, or acknowledgments).]

Task 3: Technology Transfer
[Some form of technology transfer will be required. Technology transfer activities can be limited to presentations and/or articles that do not compromise the potential contractor’s ability to develop a prospect. Emphasis can be placed on new technologies or techniques, regional geologic trends, reservoir modeling, etc. In lieu of a formal technology transfer activity, the contractor can conduct a number of prospect meetings to attract joint venture or other financial interest. Also, undertaking a formal corporate development program will satisfy this requirement. Add as many subtasks as necessary to develop your technology transfer strategy.]

Task 4, 5, etc.: [Research and Prospect Development Tasks]
[Add as many tasks and subtasks as necessary to cover all actions needed to achieve the goals and objectives of the project. These will be action steps. Each task should include a detailed narrative description of the work that will be performed and how the work will be performed.]

(end of Statement of Work)

Schedule - Present a realistic work schedule, with a starting point and duration for each task and subtask. Presentation of the schedule in a bar chart is preferred.

Organization - Describe how the effort will be organized and managed and clearly identify the person(s) who will be responsible for ensuring the quality and success of the effort. If more than one individual will be performing the work, identify each individual and his/her anticipated role, function, and contribution.

Experience and Qualifications - Include a detailed description of past experiences and any additional details regarding your qualifications that are pertinent to NYSERDA's review of your proposal. Provide a brief description of relevant projects that are germane to this effort. A client reference should be included for each such project. Resumes should be included for all persons proposed to assist in meeting the contract responsibilities.

Part II: Project Budget Supplement

Cost-Sharing - Present cost-sharing as a percentage of the total cost in this format.
Cost-Sharing Summary - Present cost-sharing in the following format.

Contract Pricing Proposal Forms (CPPF) - Submit a completed form for each of the following:

Attach detailed budget breakdowns for equipment, material, and travel.

Sharing of Project Success - Area of Mutual Interest (AMI) Agreement - For projects that have clearly delineated a target exploration area, NYSERDA will require an AMI agreement with the operator. Include a discussion and recommendations in your proposal for conditions under which the AMI will be negotiated. Your recommendations for the AMI may be incorporated in a project agreement as proposed or may be subject to further negotiation. Typical contract terms define provisions for sharing a small percentage of sales revenue with NYSERDA.

Bid Package Data Rights - While the AMI is in force, NYSERDA will keep confidential the final report / prospect bid package. Should the AMI expire prior to any significant exploration or leasing activity, NYSERDA will retain data rights to the final report / prospect bid package. NYSERDA can then use this package to seek interest in the prospect. Include a discussion and recommendations in your proposal for conditions under which the data rights will be negotiated.

Evidence of Commitment by Participating Organizations - Include letters of commitment, signed by a person authorized to contractually obligate the organization, for all major participating organizations and cofunders.

PROPOSAL EVALUATION

Proposals are due on January 16, 2001. Proposers will be notified no later than FOUR (4) weeks after proposal evaluation as to the status of their submission. Proposals will be scored by a Technical Evaluation Panel (TEP) consisting of NYSERDA staff and external reviewers.

Proposals meeting program requirements will be scored according to technical criteria; cost proposals will be evaluated for reasonableness; and proposals will be reviewed to determine whether they meet the overall objectives of NYSERDA. The Proposal will be scored according to the following criteria:

Approach - Does the proposed project seem to be geologically and technically viable and innovative? Is the proposal likely to best identify the target? Is the approach likely to meet the study objectives?

New York State Impact - Are the potential benefits to New York State clear and adequate? How likely is it that the benefits will be realized?

Statement of Work and Schedule - Is the Statement of Work clear, comprehensive, and consistent with the Proposal Requirements? Can the proposer meet the schedule? Are staff allocations reasonable? Will the data be provided in an acceptable format?

Partnership Qualifications - Are the roles of responsibility for the proposer(s) defined? Do key personnel have the necessary qualifications and experience? Does the team have the necessary facilities? Does the team show a balance of technical, operations, marketing, and administrative expertise? Is there evidence of a good performance record on other relevant projects?

Cost Factors - Is the overall cost justified by the anticipated benefits? Are the labor hours reasonable, based on work needed for the task or subtask and the skill type or labor category proposed? Do the materials, equipment, facilities, and travel plans appear to be consistent with the Statement of Work?

Cost-sharing - Is the cost-sharing plan reasonable, based on the stage of development and role of the participants? Are the cost-sharing contributions (cash, in-kind, etc.) verifiable and reasonable?

Other Considerations - NYSERDA management staff will consider programmatic and management issues in the development of a portfolio of funded research, development, and demonstration projects. Examples of programmatic and management issues include, but are not limited to, the following: diversification of the R&D program, geographic diversity, availability of funds, and replication potential in New York State, and acceptance of NYSERDA’s contractual terms and conditions.

VI.PROPOSAL SUBMISSION

To respond to this PON, submit by mail 8 copies of your proposal by Tuesday, January 16, 2001, 3 p.m. to:

Karen Whalen, PON No. 560-00
NYS Energy Research and Development Authority
17 Columbia Circle
Albany, New York 12203-6399

FAXED copies will not be accepted.

VII. GENERAL CONDITIONS

PROPRIETARY INFORMATION
Careful consideration should be given before confidential information is submitted to NYSERDA as part of your proposal. The proposer should determine whether the information is critical for evaluating a proposal, or whether general, non- confidential information, may be adequate for review purposes. The New York State Freedom of Information Law, Public Officers law, Article 6, provides for public access to information NYSERDA possesses. Public Officers Law, Section 87(d) (2) provides for exceptions to disclosure for records or portions thereof that "are trade secrets or are submitted to an agency by a commercial enterprise or derived from information obtained from a commercial enterprise and which if disclosed would cause substantial injury to the competitive position of the subject enterprise." Information submitted to NYSERDA that the proposer wishes to have treated as proprietary, and confidential trade secret information should be identified and labeled "Confidential" or "Proprietary" on each page at the time of disclosure. This information should include a written request to except it from disclosure, including a written statement of the reasons why the information should be excepted. See the procedure described in Public Officers law, Section 89(5).

Proposers who want to submit confidential or proprietary information must contact the Director of Contract Management, Robert Callender, at (518) 862-1090, ext. 3233, to discuss classification and handling prior to submitting the proposal. Failure to follow proper procedures may result in a delay in reviewing the proposal, or return of the proposal without evaluation on the grounds that it is non-responsive to the solicitation.

MINORITY- AND WOMEN-OWNED BUSINESS POLICY
NYSERDA fosters and promotes participation of minority- and women-owned businesses (M/WBE) in its programs.

Information on the availability of New York State subcontractors and suppliers is available from:
Empire State Development
Division for Small Business
30 S. Pearl St.
Albany, NY 12245.

A directory of certified minority and women owned business enterprises is available from:
Empire State Development,
Minority and Women’s Business Development Division,
30 S. Pearl St.
Albany, NY 12245.

CONTRACT AWARD
NYSERDA may award a contract based on initial proposals without discussion, or following limited discussion or negotiations. Proposals should not be excessively long, or submitted in an elaborate format that includes expensive binders or graphics. Each offer should be submitted using the most favorable cost and technical terms. NYSERDA may request additional data, or material to support proposals. NYSERDA will use the attached Sample Agreement to contract successful proposals.

LIMITATION
This solicitation does not commit NYSERDA to award a contract, pay any costs incurred in preparing a proposal, or to procure or contract for services or supplies. NYSERDA reserves the right to accept or reject any or all proposals received, to negotiate with all qualified sources, or to cancel in part or in its entirety the solicitation when it is in NYSERDA's best interest.

DISCLOSURE REQUIREMENT
The proposer shall disclose any indictment for an alleged felony, or any conviction for a felony within the past five years, under the laws of the United States or any state or territory of the United States, and shall describe circumstances for each. When a proposer is an association, partnership, corporation, or other organization, this disclosure requirement includes the organization and its officers, partners, and directors or members of any similarly governing body. If an indictment or conviction should come to the attention of NYSERDA after the award of a contract, NYSERDA may exercise its stop-work right pending further investigation, or terminate the agreement; the contractor may be subject to penalties for violation of any law which may apply in the particular circumstances.

Attachments
Proposal Checklist
Contract Pricing Proposal Form (CPPF) (see item #7 on our Standard Forms page)
Sample Agreement with Exhibits