Page 2 ■ Thursday, December 29, 2011
BAKKEN NEWS Huge Bakken unit approved
By LAUREN DONOVAN Bismarck Tribune
Publisher
Brian Kroshus Editor
Cathryn Sprynczynatyk
Advertising Manager Kristin Wilson
Layout Design Joni Obrigewitch For advertising
opportunities, please call 701-250-8212 or 866-476-5348.
oil drilling in the Bakken was approved Dec. 20, when the state Industrial Com- mission created the Corral Creek Bakken Unit with 30,000 acres around and in- cluding the Little Missouri State Park. Typically, spacing units are much smaller at 1,280 acres, but this one north of Killdeer is intended to give the oil com- panies more leeway to keep wells out of the Little Missouri River fl oodplain and out of the area’s scenic view shed. It also refl ects an unusual situation
The single biggest spacing unit for
PO Box 5516
Bismarck, ND 58506-5516 701-223-2500
www.bismarcktribune.com Bakken Weekly is produced
by the Bismarck Tribune and distributed throughout the Williston Basin.
in which 50 percent of the minerals are owned by Burlington Resources and 10 percent are owned by the federal gov- ernment. Unitizing requires 60 percent of the mineral owners sign on to it; in this case, only two entities are involved, rather than the dozens, sometimes hun- dreds of mineral owners associated with one spacing unit. The effect of the unitization is that all 30,000 acres are treated as one gigantic lease. That means that all mineral own- ers share in all the oil production from start to fi nish, instead of just their own, and oil companies can put oil roads or pipelines anywhere in the unit, without having to negotiate easements with pri- vate landowners or adhere to section line setbacks.
since production from just one well in the new unit would be enough to secure, or “hold” all the leases, the companies could leave a portion of the unit unde- veloped. There are already 12 wells in the unit
and there was concern that those wells could be used to hold the leases even if no more wells were ever drilled. Mean- while, those mineral owners would be sharing royalties with everyone else in the 30,000-acre unit. The Industrial Commission’s order
Some mineral owners worried that
MIKE McCLEARY/Tribune
Landowners Bob and Candyce Kleeman, upper right, of rural Killdeer, listen to Lynn Helms, center, director of the Department of Mineral Resources, talk before the state Industrial Commission meeting the morning of Dec. 20 at the state Capitol in Bismarck. The Kleemans are worried landowners will lose control of their property rights under the unitization of land in the oil patch.
included a provision that the oil com- pany has four years to completely drill all 80 wells proposed for the unit. A manda- tory hearing will be held in 2016 and any undeveloped tracts would be removed from the unit, the order says. Department of Mineral Resources
creating a unit is that the drilling activity will be lighter on the land. He said without the unit, the drilling
Director Lynn Helms said the threat of losing leases that would then be open to competitive bidding should be enough to force Burlington Resources to fi nish its drilling plan. He said Burlington Re- sources says it will take three rigs in and drill all the wells in 31/2 years. Helms said the other advantage of
plan would require up to fi ve more well pads, four of those within the boundar- ies of the Little Missouri State Park, an- other 15 additional tank batteries for oil storage and would strand 15 million bar- rels of oil. “The positives are that this minimizes
the footprint, with fewer trucks and less fl aring,” Helms said. The downside is loss of control on the part of surface owners,
Continued on page 9
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16