Oil Company Forfeits Oil / Well For Drilling "Wrong" Location -- Denver Post -- January 11, 2016

Disclaimer: in a long post like this, there will be typographical and factual errors. In addition, I provide a lot of information from the file report which I may have misread or misunderstood. See further disclaimer further below. If this information is important to you, go to the source. I am posting this only for my benefit to help me better understand the Bakken. Do not quote me on any of this that I have come to any conclusion on this well. 

From The Denver Post:

North Dakota regulators ordered a Denver company to forfeit crude oil that was obtained from an area where it did not hold a lease. 

The North Dakota Industrial Commission on Monday ordered Gadeco LLC to forfeit the 800 barrels of oil. Proceeds from the sale of the oil will go into the state's general fund. 

State Mineral Resources Director Lynn Helms says the company drilled into an area in Williams County in error. 

He says the company spent more than $8 million drilling the well, which is now plugged. 

Helms says it's the first time such an incident has happened in North Dakota.

This is the well:

NDIC File No: 21173     API No: 33-105-02293-00-00
Well Type: OG     Well Status: DRY     Status Date: 2/19/2015     Wellbore type: Horizontal
Location: NENW 25-155-99     Footages: 460 FNL 2475 FWL     Latitude: 48.225525     Longitude: -103.356239
Current Operator: GADECO, LLC
Current Well Name: GOLDEN 25-13H
Elevation(s): 2357 KB   2334 GR   2334 GL     Total Depth: 19920     Field: EPPING
Spud Date(s):  10/9/2011
Casing String(s): 9.625" 2225'   7" 11392'  
Completion Data
   Pool: BAKKEN     Perfs: 11392-19920     Comp: 5/24/2012     Status: DRY     Date: 2/19/2015     Spacing: 2SEC
Cumulative Production Data
   Pool: BAKKEN     Cum Oil: 800     Cum MCF Gas: 101     Cum Water: 0
Production Test Data
   IP Test Date: 5/24/2012     Pool: BAKKEN     IP Oil: 46     IP MCF: 7     IP Water: 20

Monthly Production Data

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	12-2013	5	554	0	0	0	0	0
BAKKEN	5-2012	5	246	0	0	101	0	101

I've gone through the file report and there were two issues:

• paperwork
• location

The paperwork issue was related to the delay in activity for "long" periods of time on this pad. 

Disclaimer: I went through the paperwork quickly and may have missed something. I have no formal training in the oil and gas industry and no formal training in reading file reports, so I may have missed something or misread something. 

Disclaimer: Perhaps others have the back story, and I am way beyond my comfort zone here, but I will post some comments, some of which appear to be factual, but may, in fact, be opinion. If this information is important to you, do not rely on this. Go to the source. In addition, please feel free to read this, but do not "quote me" on this as having made any conclusion or determination. I am simply thinking out loud.

• It appears the well was sited as stated on the NDIC-approved permit application.
• It appears the bottom hole ended in the section as requested on the NDIC-approved permit application.
• The well was fracked back in 2012, open-hole, with about 1.8 million lbs of proppant.
• 20-stage frack; the company was required to cement the 20th stage; not located in drilling unit;
• There was a long period of inactivity on the well -- greater than a year, and less than two years.
• NDIC notified the company that the failure to produce oil or natural gas for greater than one year, constitutes an abandoned well.
• There were some paperwork / documentation issues.
• It's my impression that the NDIC works with oil companies to resolve paperwork / documentation issues.
• A sundry form reiterated that it was a location problem and in that sundry form referenced the KOP.
• The well was sited about 460 feet south of the approved drilling unit.
• I'm not exactly sure what the rules are regarding where the KOP and the lateral horizontal must begin (ECP/ICP) but this case may provide some insight.
• The linked article states this was the first time this has ever happened in North Dakota; based on one sentence in the 190+ page file report suggests that it may have been discovered due to simple serendipity.