BATON ROUGE - On Wednesday, the Department of Natural Resources spoke on the investigation regarding potential malfeasance involving one of their employees.

In 2013, Johnny Adams began serving as the attorney supervisor for the Office of Conservation. On Sept. 30, 2019, the Louisiana Oilfield Restoration Association, or LORA, was incorporated. 35 days later, LORA signed a contract with the Office of Conservation on Nov. 4, 2019.

The search warrant from the East Baton Rouge Sheriff's Office asked for documents dating back to Sept. 30 of 2019.

The contract is a cooperative endeavor agreement that gave LORA the ability to collect fees from oil drillers and then if the oil drillers failed and went out of business, LORA would use the money collected from the fees to plug the orphaned wells.

"In exchange for the Office of Conservation's recognition of LORA as a valid provider of financial security for oil and gas providers, there were certain requirements made of it. The interest rate you would charge operators to pay into, the bond would be no more than 3.5-percent, the total per year. Once they met a certain reserve fund amount of the money they take it, they would then use a percentage of what comes in each year to plug orphaned wells that weren't on their list. Wells that were on the orphaned well list, but not wells they had secured," Department of Energy and Natural Resources Communications Director Patrick Courreges said.

Courreges said there were around 4,700 orphaned wells in the state. He added of 175 that under LORA's watch and financial responsibility, 40 were plugged overall. He said there are dangers that come with leaving orphaned wells alone.

“You got the potential for oil spills, gas leaks, things like that," Courreges said.

On Nov. 4, 2019, LORA signed the contract with the Office of Conservation. Johnny Adams notarized the document. His wife, Metro Council member Laurie Adams, signed as a witness.

According to the search warrant, in May 2021, Johnny Adams becomes the Assistant Commissioner of the Office of Conservation (OC).

According to the search warrant, in April 4, 2023, LORA withdrew $780,000 from a Morgan Stanley investment account, and deposited the same amount in an Investar Bank operating account. 10 days later, LORA's treasurer, Andrew Berthelot, withdrew $780,000 from that operating account with a counter check. Two weeks later, Johnny and Laurie Adams bought a $780,000 home in a cash sale.

According to the Louisiana Department of Natural Resources, the average cost to plug an orphaned well can start at $30,000 and reach more than a million based on factors like depth, decay, and location. $780,000 could have potentially covered the cost of plugging more than 20 orphaned wells.

John McLindon is the attorney representing Johnny Adams. In an e-mail statement, he wrote, “There is a lot of misinformation out there and we will set the record straight in due time.”

When asked on the phone to clarify what misinformation he was referencing, McLindon said, "That's all I'm saying."

In Feb. of 2024, under a new administration, the Office of Conservation's Commissioner Monique Edwards sent LORA President Van Mayhall a letter of non-compliance.

Courreges said the OC was concerned with LORA.

“It really kind of got started with Commissioner Edwards when Commissioner Ieyoub passed away. She had questions about the arrangement and asked auditors to come in," Courreges said. "That’s when they started looking into it… to the point of sending the non-compliance letter.”

The compliance letter in question said LORA violated the cooperative agreement by failing to "plug orphan wells as designated by the Office of Conservation, and not providing financial security or plugging wells for which you have provided financial security and the Office has made you aware of for the 2023 calendar year."

Courreges said there was a law passed a couple years, R.S. 30:4(T), that required any organization entering a cooperative endeavor agreement must include a provision giving access to financial records, meaning LORA would be required to open their books to third-party audits. Courrege said LORA never signed the revision.

"You want to be able to make sure that if you're having an agreement with someone, they're living up to their end of it." Courrege said. "That's kind of where we are right now with investigating what has happened, waiting on what the audit report shows and figuring what the next steps are from there."

In an e-mail released by DNR, Mayhall responded claiming LORA was not out of compliance because the cooperative endeavor agreement was signed before the law passed and the agreement did not include the provision. Mayhall wrote, "LORA wants to cooperate fully with the OOC and the Auditor."

In September, the search warrant said the Louisiana Legislative Auditor's Office requested assistance from the East Baton Rouge Sheriff's Office for the investigation. On Oct. 3, the Office of Conservation said Johnny Adams was suspended with pay.

David LaPlante is an associate with Harris, DeVille and Associates, a local communications firm. He issued a statement in regard to LORA, saying LORA is a private company that operates in compliance with the terms of its cooperative agreement with the LDENR’s Office of Conservation.

"The concept of LORA was created by the Office of Conservation to help plug orphan oil and gas wells using private industry dollars and not state or public funds," LaPlante said. "LORA has plugged orphan wells every year since it began plugging operations in 2022, and to date has plugged more than 120 orphan wells in total.  Many Louisiana oil and gas operators depend upon LORA for affordable financial security."

When asked about information regarding the $780,000 bank withdrawal, LaPlante wrote back saying he did not have any information on the withdrawal.

Courreges said the DNR is still waiting for the legislative audit to come out and do not have an expected date for completion.