Farmer says pipeline company must ‘do something better’ after second spill

Williams County farmer Ron Sylte visits the site of a saltwater pipeline leak Monday, Jan. 11, 2016, in a durum field that he farms. Amy Dalrymple/Forum News Service

Williams County farmer Ron Sylte visits the site of a saltwater pipeline leak Monday, Jan. 11, 2016, in a durum field that he farms. Amy Dalrymple/Forum News Service

WILLISTON, N.D. – The same man affected a year ago by the state’s largest pipeline spill discovered Monday that land he rents is now the site of a new cleanup operation.

Williams County farmer Ron Sylte drove by a field where he grows durum to find crews excavating contaminated soil after a pipeline owned by Meadowlark Midstream leaked 187 barrels, or 7,854 gallons, of saltwater last week.

The spill occurred almost exactly a year after the same company, a subsidiary of Summit Midstream, discovered a spill of nearly 3 million gallons on land Sylte owns about 1½ miles north.

“I don’t see that they have a good pipe in the ground,” Sylte said. “If they don’t do something better than what they have, they’re going to have more of these.”

State regulators also are concerned to see a second leak on the same pipeline system a year later and are doing a thorough investigation, said Lynn Helms, director of the Department of Mineral Resources.

“After the first failure, we increased our presence and monitoring and observation of the area, and we’ll probably want to take that up another notch,” Helms said Monday.

Sylte, who has been working with the company for a year as it continues to clean up last year’s spill near Blacktail Creek, said he didn’t learn about the latest spill until he saw crews in the field Monday. The spill occurred Thursday afternoon and was reported to state officials on Friday.

“I was just disappointed they didn’t call me last Friday,” said Sylte, who has farmed that land north of Williston since 1981. “At least let me know what’s going on.”

The company did notify the out-of-state landowner, Sylte said, but he didn’t know when.

Saltwater is a briny waste byproduct of oil development that is transported through pipelines to a disposal site.

In the latest spill, crews shut down the pipeline within 15 minutes of discovering a problem with the line, a Summit spokesman said. The quick detection was a result of investments in a SCADA system, which stands for supervisory control and data acquisition, that gathers information on the pipeline every five minutes to identify possible leaks and changes in pressure, the spokesman said.

A spill report says the Summit Operations Communications Center shut down the pipeline on Thursday after being notified through its leak detection system of a deviation in pipeline flow and pressure. Field staff then went to the area, walked the pipeline system and confirmed the pipeline leak at 3:36 p.m., the report states.

Helms said investigators have not yet verified that the pipeline was shut down within 15 minutes.

In last year’s spill, state regulators allege the pipeline had been leaking for more than three months before it was discovered. That spill remains under investigation by the North Dakota Industrial Commission, the North Dakota Department of Health and the Environmental Protection Agency.

Although the latest spill was discovered more quickly, that didn’t mean a lot to Sylte on Monday.

“It doesn’t really increase my faith in them at all,” Sylte said.

Cleanup crews were wrapping up the excavation work late Monday and beginning to haul contaminated soil to a landfill, said Bill Suess, spill investigation program manager for the North Dakota Department of Health.

The latest spill did not contaminate any surface water and so far officials have not detected groundwater contamination, Suess said.

After the excavation is complete and tests confirm that the contamination has been removed, crews will replace the soil that was removed. The land will be monitored for at least one year, if not longer, to see if vegetation will grow, Suess said.

“We won’t know until this summer,” Sylte said.

Vote on huge pipeline nears, but one PSC member bows out

BISMARCK – The North Dakota Public Service Commission moved one step closer Monday to approving what would be the largest crude oil pipeline in the Bakken, but one of the panel’s three members said he won’t vote on it because the revised pipeline route crosses a relative’s property.

Commissioners had some unresolved questions about the Dakota Access Pipeline, but after a work session Monday the project is likely headed to a vote on Jan. 20.

Energy Transfer Partners proposes to build a 1,134-mile pipeline that would carry Bakken crude from North Dakota to Patoka, Ill. The project would initially carry 450,000 barrels of crude oil per day.

Commissioner Randy Christmann said Monday he will no longer participate in discussions on Dakota Access because he’s learned the pipeline will now cross his mother-in-law’s property.

In April, Christmann notified other commissioners that the route would go near his mother-in-law’s property, but at that time he didn’t feel he had a conflict of interest.

The route has since changed, and now his mother-in-law is negotiating an easement with Dakota Access, Christmann said.

“Based on these changed facts, I’m now recusing myself from further participation in this case,” Christmann said.

Commissioner Brian Kalk said that the commission has procedures in place in case they need a third vote.

A group of several landowners who had intervened in the case have reached agreements with Dakota Access, said the commission’s attorney, Zachary Pelham. That means Dakota Access has now negotiated voluntary easements for 95 percent of the route in North Dakota, Pelham said.

“The fact that they’ve signed up leads me to believe that they’re making some pretty serious commitments on reclamation,” said chairwoman Julie Fedorchak.

One issue commissioners wanted to have resolved before voting on the project was how Dakota Access would work with Enbridge in areas where the competitors have pipelines that would be close together.

The two companies reached an agreement filed earlier this month that specifies that the pipelines will be constructed 50 feet apart when possible and no less than 25 feet apart. The agreement also outlines who will be responsible for reclamation if construction of the Dakota Access and the Enbridge Sandpiper line happens at the same time.

Fedorchak said the agreement should help address concerns raised by members of the public about which company would be responsible for reclamation in areas where the construction zones overlap.

In addition, third-party construction inspectors can help identify which company is responsible for restoring the land, Fedorchak said.

“I feel that we can address a lot of those concerns through the construction inspection process,” Fedorchak said.

The project has received regulatory approval from utility commissions in South Dakota and Illinois but still needs approval in North Dakota and Iowa.

Corral Creek drilling unit to be reviewed

BISMARCK – A company developing a controversial drilling mega-unit in Dunn County that initially had a January target for completion will give an update on the progress Wednesday during a hearing in Bismarck.

The North Dakota Oil and Gas Division will hold a hearing at 9 a.m. Wednesday to review the status of the Corral Creek-Bakken Unit, a 30,000-acre oil development near Killdeer.

When the North Dakota Industrial Commission approved the unit four years ago, commissioners were told operator ConocoPhillips would operate three drilling rigs to complete the wells in 3½ years.

But some royalty owners who opposed the drilling plan feared it would take six or more years to fully develop their minerals. The commission set a January 2016 deadline to review the progress, and the commission has the ability to remove tracts of land from the unit or make other adjustments.

Recently, ConocoPhillips has had two drilling rigs working in the unit and the drilling is not yet complete.

However, the company is now drilling more wells in the unit than originally anticipated, said ConocoPhillips spokesman Jim Lowry.

The initial plan included 81 new wells in addition to 12 wells already in the unit. To date, the company has drilled 134 wells, Lowry said.

Alison Ritter, spokeswoman for the Oil and Gas Division, said 161 permits have been issued so far for the unit.

“We’re ahead of what the anticipated schedule was,” Lowry said. “I think it will be a fairly positive report from ConocoPhillips on our progress and our anticipated progress next period.”

Royalty owner David Schwalbe, who was among those who opposed the unit, said he plans to ask several questions during Wednesday’s hearing, including asking for an independent audit of the entire field.

“This thing has progressed to the point where it’s there, it’s going to be there. We can’t reverse this,” Schwalbe said. “What we want now is to bring some honesty into it to make sure everybody’s being treated fairly and to be sure that they’re doing what they’re supposed to be doing.”

Under a unitization agreement, dozens of royalty owners share the revenue of the whole area according to a formula rather than having individual leases for their wells.

But Schwalbe says the way that mineral owners are compensated is so complex that they have no way of knowing if they’re being treated fairly.

“We have asked some pretty good math geniuses to figure this out. I’ve asked people in the industry and they just shake their head,” Schwalbe said. “It’s so complicated that we have no idea what percent we’re getting.”

Lowry said ConocoPhillips is meeting all agreements that were signed with mineral owners.

The Corral Creek unit, which includes Little Missouri State Park, is the only area being developed as a unit in the Bakken. Although several individual mineral owners opposed it, Burlington Resources, which was acquired by ConocoPhillips, the state of North Dakota and the federal government made up more than 60 percent of interest in the unit, which was enough to proceed.

Lynn Helms, director of the Department of Mineral Resources, recommended approval of the unit because he said developing it that way would have less impact on the Little Missouri State Park and it would keep well pads out of the river’s flood plain.

The company also said developing the area as a unit would allow for the recovery of more oil while minimizing the impact to the land.

Nearly a year after the Industrial Commission approved Corral Creek, petitioners in Dunn County sought to have a grand jury investigate whether campaign contributions Gov. Jack Dalrymple received from companies involved in the unit violated bribery statutes. The petitions were dismissed.

Members of the public can speak during Wednesday’s hearing, which is at 1000 East Calgary Ave., Bismarck. The public can also listen to the hearing live at www.dmr.nd.gov/oilgas under the “hearing dockets” tab.

Making a change in practices, state to take a closer look at oil industry fines

BISMARCK – Proposed fines against oil companies will get more scrutiny from the North Dakota Industrial Commission on Monday, but the discussion will occur behind closed doors.

The Industrial Commission agenda for Monday includes discussion of six complaints against oil companies accused of violating state oil and gas regulations.

It’s a departure from how the commissioners – Gov. Jack Dalrymple, Attorney General Wayne Stenehjem and Agriculture Commissioner Doug Goehring – have handled such cases recently.

Typically, the commission receives a list of complaints and proposed fines in a quarterly report, but commissioners have said they want updates more often, said Karlene Fine, executive director for the Industrial Commission.

“The commission indicated they’d like more background information,” Fine said.

The Industrial Commission has received public criticism recently for its common practice of reaching settlement agreements with oil companies and suspending all but 25 percent to 10 percent of fines.

Alison Ritter, spokeswoman for the Department of Mineral Resources, said commissioners have said they want to review more of the agreements.

Fine said she doesn’t think the change in practice is a response to that criticism, but rather a desire to get information on a more timely basis.

The discussion Monday will occur during a closed executive session to allow commissioners to discuss the cases with their attorneys.

A Democratic senator from Fargo pushed last legislative session for more transparency of settlement agreements with the oil industry. A bill introduced by Sen. Tyler Axness would have required members of the Industrial Commission to take a public roll call vote each time a case is settled.

The Industrial Commission opposed the bill and Lynn Helms, director of the Department of Mineral Resources, testified against it.

The bill failed in the Senate along party lines, with the exception of Sen. David Rust, R-Tioga, who supported it.

“If this was a public matter, there may be changes in some attitudes and practices,” Axness said Friday.

Rust said he supported the bill because some of his constituents were upset about fines that were dramatically reduced. Rust said he sees merit in reducing fines if it’s to ensure that a site gets cleaned up, but he thinks the commissioners should periodically revisit their practice to see if it’s still working.

Helms has defended the practice of suspending fines because he said it deters repeat offenses.

However, two of the complaints on Monday’s agenda are for Oasis Petroleum, and one of the incidents appears to be similar to a previous violation.

In May, Oasis paid $16,500 in fines and fees to the state – with $60,000, or 80 percent – suspended for one year. The settlement stemmed from a November 2014 mechanical failure that caused a well to release uncontrollably for three days in Williams County.

Now the Industrial Commission proposes a $100,000 fine for Oasis for violations related to an out-of-control well that spewed oil, gas and brine for four days near the White Earth River in Mountrail County in October.

In addition, the Industrial Commission will discuss Monday a $87,500 fine proposed for Oasis for a May saltwater pipeline spill that affected a creek and Smishek Lake in Burke County.

The other companies to be discussed are:

— Black Gold Energy Resource Development, which faces potential fines of $325,000 fine for an October 2014 complaint. In that case, the company is accused of having leaking tanks and improper diking at a well location in Dunn County. The commission also alleges the company failed to properly file oil and gas production reports. A complaint against Black Gold Energy Russian Creek Facility proposes $12,500 in fines for the same allegations of leaking tanks and improper diking.

— Pride Energy faces up to $75,000 in fines from a November 2014 complaint that alleges the company failed to get required regulatory approval and file proper oil production reports for wells in McKenzie County.

— Jettison Inc. faces a potential fine of $25,000 for not completing reclamation on a well in Billings County that was plugged and abandoned in October 2012.

 

Year after ND’s worst pipeline spill, same system leaks again

WILLISTON, N.D. – The company responsible for North Dakota’s largest pipeline spill reported another leak on the same pipeline system Friday.

Meadowlark Midstream, a subsidiary of Summit Midstream, reported Friday that 187 barrels, or 7,854 gallons, of saltwater leaked from the pipeline Thursday afternoon about 15 miles north of Williston.

The spill occurred about 1½ miles south of where a pipeline leak was discovered almost exactly a year ago on the same saltwater pipeline system, said Bill Suess, spill investigation program manager with the North Dakota Department of Health.

In this case, the spill did not contaminate Blacktail Creek or any other surface water, Suess said. It’s still unknown if the latest spill contaminated groundwater, he said.

Health officials and the Oil and Gas Division are investigating. In this case, officials will take a close look at what’s going on to cause two leaks in the same system, Suess said.

“Anytime you have two releases from a single system, you’re going to have a concern,” Suess said.

On Jan. 6, 2015, the company discovered a pipeline leak adjacent to Blacktail Creek that involved an estimated 3 million gallons of brine. The contamination also reached the Little Muddy and Missouri rivers.

In that case, the North Dakota Industrial Commission alleges that the pipeline was leaking for more than three months before it was discovered. An investigation is still ongoing.

That segment of pipeline has been shut down since the spill was discovered, said Alison Ritter, spokeswoman for the Department of Mineral Resources.

In the latest spill, crews were able to shut down the pipeline within 15 minutes of detecting a problem due recent investments leak monitoring and detection, said a spokesman for Meadowlark Midstream.

The spill occurred at 3:36 p.m. Thursday and it was reported to state officials at 3 p.m. Friday, just under the 24-hour deadline to report spills, Suess said.

Crews were excavating the contaminated soils on Friday and health officials plan to visit the site again on Saturday. The pipeline continues to be shut down.

“The incident has been fully contained and Meadowlark is working cooperatively with the appropriate state agencies,” the company said in a statement.

No cause is yet known for either pipeline leak. The Industrial Commission has proposed $2.4 million in fines to Summit Midstream for the 2015 spill, alleging that the pipeline likely began leaking on or before Oct. 1, 2014, or 98 days before it was discovered.

The Williams County Commission has sent a letter to the Industrial Commission urging them to impose the entire fine, rather than their typical practice of suspending 75 percent to 90 percent of the fine.

The Environmental Protection Agency also is investigating Summit for the 2015 spill. The state health department plans to issue its own penalty for the 2015 spill, jointly with the EPA, but is waiting for an EPA criminal investigation to conclude, state health officials have said.

Oil industry claim on flaring progress doesn’t reflect full picture

WILLISTON, N.D. – North Dakota’s oil industry significantly reduced flaring last year, but the decrease may not be as substantial as an industry leader portrayed it in Fargo this week.

Ron Ness, president of the North Dakota Petroleum Council, said during a Fargo Moorhead West Fargo Chamber of Commerce event Tuesday that the industry decreased flaring 65 percent last year.

After the event, Ness explained to Forum News Service that he arrived at that figure using the percent of natural gas flared currently (13 percent) and comparing it to the historical flaring high (36 percent) that the industry had in February 2014.

Using those figures, the industry decreased the percent flared by 23 percentage points between February 2014 and October 2015, or a 64 percent change in the percentage.

Ness said he used the percent of gas flared – rather than the volume – because the gas capture targets set by the North Dakota Industrial Commission are also based on percentages.

“I’ve always used the percentage basis because that’s what the targets have been set on and that’s the measuring stick,” Ness said.

But when comparing the volume of gas flared during that same timeframe, the decrease is still in double digits, but less substantial.

The industry flared an average of 375.8 million cubic feet per day of natural gas in February 2014, according to Department of Mineral Resources figures.

In October 2015, the most recent data available, the industry flared 236.7 million cubic feet per day, a 37 percent decrease in volume during the same timeframe Ness references.

In addition, Ness begins his comparison when flaring in the state was unusually high because the Hess Corp. gas processing plant at Tioga was down as the company transitioned to a new facility.

Ness said he used that timeframe because the industry was criticized for the 36 percent flaring rate even though it was an anomaly. Until the state’s largest gas plant went down temporarily, the state hadn’t seen flaring at 36 percent since September 2011.

“That was the number that we were demonized for, so that was the number when the commission took action,” Ness said.

Also, for the most recent figure, Ness uses the current flaring percentage from the North Dakota Pipeline Authority, which was 13 percent. But the Department of Mineral Resources, which has access to data on confidential wells, puts it at 14 percent for October, and that’s the figure considered by the Industrial Commission.

North Dakota operators decreased flaring significantly over the past two years in both volume and percentage.

In one year, from October 2014 to October 2015, the industry decreased the flared volume of natural gas by 88.8 million cubic feet per day, or a 27 percent decrease in the volume flared. The flaring percentage went from 22 percent to 14 percent in that same timeframe, according to Department of Mineral Resources numbers.

Ness added that the industry has decreased flaring while natural gas production has continued to increase.

During the one-year timeframe from October 2014 to October 2015, the industry increased natural gas production by 15.7 percent to an average of 1.7 billion cubic feet per day.

The American Gas Association says 1 billion cubic feet of natural gas can meet the needs of 10,000 to 11,000 American homes for one year.

State approves pipeline to run under Lake Sakakawea

BISMARCK – The North Dakota Public Service Commission approved Tuesday a crude oil pipeline that will cross Lake Sakakawea.

Commissioners, who supported the project unanimously, said Sacagawea Pipeline Co. is taking several steps to minimize potential impacts to the lake, including boring at least 100 feet under the lakebed.

The 70-mile pipeline will transport oil from south of Keene in McKenzie County to a rail terminal near Palermo in Mountrail County. The $125 million project will travel beneath the lakebed of Lake Sakakawea for 7,000 feet, which requires boring underground for 11,000 feet – more than two miles.

Commission Chairwoman Julie Fedorchak said the company has hired one of the top contractors in the country to do the underground boring

At the commission’s request, the company added an extra valve on the east side of the lake that can be closed in the event of an emergency to reduce the amount of oil that could potentially spill into the lake.

In addition, the pipeline will be continuously monitored from a control center in Oklahoma and the operator will have personnel and equipment stationed nearby for emergency spill response.

“They have taken some really important measures to mitigate some of the most significant potential impacts,” Fedorchak said.

The pipeline will transport 140,000 barrels of crude oil per day to the rail terminal owned by Phillips 66.

“This is an important piece of key infrastructure in an area of the state that has a lot of truck traffic due to oil and gas development,” Fedorchak said.

Sacagawea Pipeline Co. is a joint venture with Paradigm Energy Partners, which will build the pipeline, Phillips 66, which will operate the pipeline and the rail terminal, and Greywolf Midstream, an entity owned by Three Affiliated Tribes that’s an investor in the project.

The Three Affiliated Tribes consented to an easement for the portion of the project that crosses tribal land, Fedorchak said.

The commission is considering another proposal from Sacagawea Pipeline Co. for an eight-mile pipeline that would transport oil from the Palermo rail terminal to the Enbridge oil terminal in Stanley. A public hearing is set for 10 a.m. Jan. 12 in Stanley for that proposal.

Oil drilling rig count at 58 and still falling

Idled drilling rigs are pictured at a depot in Dickinson, N.D., on June 26, 2015. REUTERS/Andrew Cullen

Idled drilling rigs are pictured at a depot in Dickinson, N.D., on June 26, 2015. REUTERS/Andrew Cullen

WILLISTON, N.D. – North Dakota has fewer than 60 drilling rigs operating in the state for the first time since 2009, about a third of what were operating a year ago.

The state’s rig count fell to 58 on Monday, with three more rigs scheduled to become idle after crews complete drilling the current well.

The last time North Dakota’s rig count was below 60 was in October 2009 when the state had 55 rigs, said Alison Ritter, spokeswoman for the Department of Mineral Resources.

A year ago, North Dakota had 171 active drilling rigs, but that figure has steadily fallen as oil prices dropped to the lowest rate since 2008.

“From a year ago, it’s quite shocking,” said Ron Ness, president of the North Dakota Petroleum Council.

Lynn Helms, director of the Department of Mineral Resources, said in December, when the rig count was 65, that he expected it to fall by another 10 as companies continue to cut back on costs. Ritter said Monday that projection still holds true.

Although the rig count is one indicator of how busy oil activity is, Ness said the big thing to watch in 2016 is how many wells companies complete.

At the end of October, the state had 975 wells that were drilled but waiting on hydraulic fracturing crews as companies prefer to keep the oil in the ground until prices recover.

Ness said companies don’t have much optimism for the first part of 2016 and he expects more well completions to be delayed.

“They are likely to sit as tight as they possibly can,” Ness said.

Drilling is concentrated in the core area of the Bakken, where companies can get the highest returns on investment.

McKenzie County continues to have the most drilling with 25 rigs active on Monday. Dunn County had 13, Mountrail County had eight and Williams County had five active rigs on Monday.

Divide and Burke counties each had two active rigs and Stark, Bowman and Renville counties each had one.

The Department of Mineral Resources estimates that every rig supports about 120 jobs.

 

Oil has slowed but natural gas is still cooking

Rob Bertola, operations foreman for XTO Energy's Ness Gathering facility near Tioga, N.D., says he and his staff have stayed busy as the company expanded the gas plant and added new compressor stations and pipelines. Amy Dalrymple/Forum News Service

Rob Bertola, operations foreman for XTO Energy’s Ness Gathering facility near Tioga, N.D., says he and his staff have stayed busy as the company expanded the gas plant and added new compressor stations and pipelines. Amy Dalrymple/Forum News Service

TIOGA, N.D. – As drilling and fracking have slowed in North Dakota, Rob Bertola with XTO Energy said he often gets asked if he’s still busy.

But Bertola, operations foreman for a natural gas processing plant, hasn’t experienced the slowdown.

In 2014 and 2015, XTO expanded its Nesson Gathering plant near Tioga, added 75 miles of new pipeline and added new compressor stations, an investment of more than $120 million.

“The drilling and stuff has slowed down,” said Bertola, who lives in Williston. “But our side, getting our structures built, pipelines in, we’re very busy.”

Investments in gathering and processing natural gas are expected to continue in 2016, even as companies look to pull more drilling rigs and hold off on completing wells. North Dakota is scheduled to have four new gas processing plants come online in 2016, plus additional gathering lines and compressor stations.

“It’s full steam ahead,” said Lynn Helms, director of the Department of Mineral Resources.

Companies that transport and process natural gas have indicated that if the state had 90 or 100 drilling rigs operating, they would be racing to keep up, Helms said. With a lower rig count – 61 this week – companies are able to catch up on a backlog of wells that need pipelines to gather the natural gas.

“They feel like now, with the slowdown in drilling and completions, they got some breathing room, but not enough that they’ve backed off from making investments (in 2016),” Helms said.

The American Gas Association says 1 billion cubic feet of natural gas can meet the needs of 10,000 to 11,000 American homes for one year.

ONEOK Partners will bring two new natural gas processing plants online this year. That will bring ONEOK’s processing capacity in the Williston Basin to about 900 million cubic feet per day, said spokeswoman Stephanie Higgins.

The Lonesome Creek plant in McKenzie County is in the startup phase and expected to process about 50 million cubic feet per day of natural gas by mid-January. Its capacity will be 200 million cubic feet per day.

The Bear Creek plant in under construction in Dunn County and expected to be complete by the third quarter of this year, adding up to 80 million cubic feet per day of capacity.

In addition, ONEOK has added natural gas compressor stations and other infrastructure that add more capacity at it Garden Creek and Stateline plants in McKenzie and Williams counties.

Oasis is constructing the Wild Basin plant in McKenzie County, expected to be complete in the second half of 2016, to process up to 80 million cubic feet per day.

Kinder Morgan is also scheduled to add a gas plant in 2016 in McKenzie County to process up to 55 million cubic feet per day. Operations are expected to begin in early spring.

The addition of new gas plants and other facilities also means the addition of permanent jobs, as the plants operate 24 hours a day, seven days a week. ONEOK is currently recruiting for 50 positions in North Dakota and Montana.

In some ways, the market conditions are helping reduce flaring, Helms said. Profit margins on oil and gas wells are narrow enough now that operators want to be able to gather natural gas from day one, Helms said.

“The market’s helping us a little bit,” Helms said.

But the uncertainty about low prices is causing companies to delay making commitments for future investments. Some natural gas investments for 2017 and 2018 were suspended, and companies indicate they’re delaying making decisions until prices recover, Helms said.

ONEOK suspended its Demicks Lake plant planned for McKenzie County. A spokeswoman said ONEOK expects to resume suspended projects once market conditions improve. In addition, Targa Resources suspended its Badlands II plant planned for McKenzie County.

Meanwhile, Hess Corp. is moving forward with a natural gas pipeline and compressor station project that is expected to have a significant impact on reducing flaring south of Lake Sakakawea.

The Hawkeye High Pressure Pipeline and Compressor Projects are expected to be complete in mid-2016, connecting wells south of the Missouri River to processing facilities in the north.

The project had been held up by permits needed for the river crossing, Helms said.

Statewide, companies captured 86 percent of natural gas in October and flared 14 percent. With the addition of the new projects, gas capture should be at 90 percent soon, Helms said.

“The flaring south of the lake should go away,” Helms said.

Shakeup in oil well ownership means big demand for inspections

BISMARCK – The number of North Dakota oil wells transferring to new owners has grown to more than 1,000, with state regulators getting more requests daily.

It’s taxing for Department of Mineral Resources staff who have to physically inspect each well and verify documentation from each new operator.

Director Lynn Helms has said some companies are selling wells to keep cash coming in with oil prices at a seven-year low.

Helms told the North Dakota Industrial Commission many wells are being purchased by venture capital firms and hedge funds that see potential when prices rebound.

“We welcome them, but cautiously,” Helms said.

North Dakota had a total of 13,174 producing oil and gas wells at the end of October.

Before a well transfer is approved, staff verify that the wells are in compliance with state regulations, said spokeswoman Alison Ritter. Other steps include making sure the wells are adequately bonded and the operators are licensed and registered with the Secretary of State.

About two-thirds of the wells being transferred are legacy wells that were drilled in the 70s, 80s and 90s, Helms said.

Occidental Petroleum, which is exiting the Bakken, is selling 346 wells, more than any other company. Lime Rock Resources, a private equity firm from Houston that acquires oil and gas properties in the U.S., is buying the wells.

Whiting Oil & Gas is now selling 331 wells to five different companies, according to paperwork submitted to the Department of Mineral Resources.

Fidelity is selling 162 wells, Corinthian Exploration is selling 92 wells and American Eagle Energy is selling 87 wells.

Seven companies purchasing wells are new to North Dakota in 2015, according to forms submitted to the state. Previously Helms said nine new operators were entering North Dakota, but Ritter said two of the companies Helms referenced were new in 2014.

The new operators are:

– Swanson Oilfield Services of Clarinda, Iowa

– Prairie Hills Oil and Gas of Big Lake, Minn.

– Resource Energy Can-Am of Highlands Ranch, Colo.

– Foundation Energy Management of Dallas

– Cobra Oil & Gas of Wichita Falls, Texas

– Scout Energy Management of Dallas

– White Rock Oil & Gas of Dallas

 

Mike Nowatzki contributed to this story