Thursday, January 30, 2014

It's In: The Vote Is 2 - 1 On QEP's "Helis" Grail "Unitization"

The Dickinson Press is reporting:
The North Dakota Industrial Commission voted 2-1 to approve a proposal from QEP Energy Co. to develop 25,000 acres in McKenzie County as one large drilling unit known as the Grail-Bakken Unit.
But individual mineral owners will still have the final say. QEP needs 60 percent approval from mineral owners and working interest owners in the unit.
Lynn Helms, director of the Department of Mineral Resources, recommended approval because QEP estimates it will be able to recover an additional 2.7 million barrels of oil by developing the area as a large unit.
PrairieMagazine.com reports (same writer):
An oil drilling proposal that drew opposition from many mineral owners moved forward Wednesday in a split vote with Gov. Jack Dalrymple objecting.
The North Dakota Industrial Commission voted 2-1 to approve a proposal from QEP Energy Co. to develop 25,000 acres in McKenzie County as one large drilling unit known as the Grail-Bakken Unit.
But individual mineral owners will still have the final say. QEP needs 60 percent approval from mineral owners and working interest owners in the unit.
Lynn Helms, director of the Department of Mineral Resources, recommended approval because QEP estimates it will be able to recover an additional 2.7 million barrels of oil by developing the area as a large unit.
I assume that first paragraph could have been written: "...that was supported by many mineral owners in which the commission voted 2 -1 ."

I have no dog in this fight, and I will hold off comments for now (the subject is full of landmines, which I don't need).

However, I have very, very strong feelings about this on so many levels, and some day, I will write about some of them, if the spirit moves me. 

4 comments:

  1. Is that a weighted 60 % or 60% of all individual owners. For example if I own 1000 acres do I have1/25th of the vote?

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    1. I don't know; hopefully someone else will have the answer. I assume it is pro-rated based on number of acres but with the oil and gas industry one never knows for sure.

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  2. Starting on page 27 of Zukerman's book THE FRACKERS,

    But George Mitchell was willing to try a relatively new drilling technique he had read about in petroleum-engineering literature that held the possibility of loosening up this compact raock and getting the gas to flow. The technique, a way of "completing" oil and gas wells, or preparing them to produce energy, was called hydraulic fracturing, or "fraccing." It entailed fracturing the rocks, or breaking them up, by pummeling them with various liquids to free up the gas trapped in those rocks.

    (Years later, hydraulic fracturing became known in the popular media as "fracking" with a "k" replacing the "c." From the beginning, industry members detested the word because of its closeness to the common expletive, not to mention a similarity to "fragging," the act of attacking fellow soldiers. "Fracking" also rhymes with "hacking," yet another word with a negative connotation. Energy veterans claim that "fracking" was first used in the late 1970s in the science fiction series Battlestar Galactica as a substitute for the curse word.)

    From this point Zuckerman continues with other methods of breaking up wells such as explosives, machine guns, and nuclear.

    If you have not already seen this I thought you would appreciate it.

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    Replies
    1. Very, very interesting. I've brought it forward to be part of an original stand-alone post on same (which was not here when you sent in the comment).

      The "k" added to "frac" is a story in itself that was discussed when I first started the blog.

      Thank you for taking time to provide all of this.

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