American Oil and Gas Reporter - October 2015 - 107

ConventionSection: Oklahoma Independent Petroleum Association
levels, are making it increasingly difficult
for OIPA members to conduct business
and are forcing some to curtail production,
a difficult proposition in the face of lower
crude oil prices, Terry relates. "The timing
could not be worse, especially because
the area is in the middle of the Mississippian play," he says. "They are handling a
lot of water, so it is imperative that they
have good disposal wells. Some members
have said the restrictions could put them
out of business, so in some cases the
impact is severe. In other cases, if operators
have enough infrastructure and their disposal wells are connected by pipeline,
they can shift volumes around to other
wells without the disposal restrictions."
Throughout the difficulties, the OCC
has been sympathetic to producers' plights
and has worked closely with industry
representatives, says Terry, a member of
Governor Mary Fallin's Coordinating
Council on Seismic Activity, chaired by
Secretary of Energy and Environment
Michael Teague.
"Even though it hurts, I have heard
very few indications that members cannot
do this," Terry imparts. "As long as the
commission is reasonable and communicative, informing us about its thinking,
nobody is more interested in finding a
solution than we are," Terry assesses.
"The industry has supplied the Oklahoma
Geological Survey with new fault maps.
It simply lacked good information, and
without that it is hard to find solutions.
"We have complied voluntarily with
plugging back some of the Arbuckle wells
too close to the basement rock and now
by even cutting back volumes," he continues. "It has been a very collaborative
process and producers have complied with
everything asked of them. I think that will
continue until we find a solution."
Under OCC directions, disposal well
operators since March have spent more
than $35 million to adjust well depths
with the aim of reducing the potential
risk of contributing to seismic activity,
McDougall points out. But specific areas'
disposal volume restrictions hit much
harder by limiting production, he says.
Seeking Solutions
"Oklahoma's oil and gas industry is
actively working with the state's leading
scientists and regulators to help gain
insight about seismicity," McDougall
says. "The industry voluntarily has spent
another $35 million on collecting valuable
seismic data that can help provide answers.

OIPA, our member companies, and the
oil and gas industry as a whole support
the continued study of Oklahoma's increased seismic activity and its possible
relation to increased seismicity in the
state."
A.J. Ferate, OIPA's vice president of
regulatory affairs, adds that the OCC is
working to balance all concerns, but the
decision to reduce injection volumes 30
percent below 2012 levels for as many
as 18 wells is substantial for wells in
which operators have conducted business
within permit requirements.
"Some of these wells did not exist in
2012, so that is a problem, but they
actually have allowed for those to continue
to inject at some of their latest rates,"
Ferate says. "But I have information on
one well that in 2012 injected 561,000
barrels. With the reduction, that goes
down to 316,000 barrels. That is a large
amount."
Some companies may opt to truck
water elsewhere, despite the expense, he
says. For others, plugging wells may be
the only alternative, Ferate says.
During the legislative interim, state
lawmakers are conducting two studies,

including one led by House Energy and
Natural Resources Committee Chairman
Weldon Watson, R-Tulsa. The studies
will examine regulatory reform and consider how injection wells work, how they
might contribute to seismic activity, and
measures to address it, Roller says. Despite
the studies, a legislative fix may not feasible, he suggests.
"There is a public outcry from those
who want to make a political statement
that should not inject any more water,
but impose a moratorium," he says. "They
do not understand the impact. In the end,
it will be difficult to pass a law without
some sound science to establish the proper
solution."
OIPA also continues to seek a compromise among members over possible
well spacing legislation that may allow
for longer laterals in areas with legacy
production, Terry reports.
"The object is for all parties to get together and come up with a solution," he
says. "Everyone may not be happy, but
perhaps we can come up with solution
that will allow longer laterals to be drilled
in Oklahoma, while at the same time
protecting everybody's interests."
❒

EQT's Utica Well Hints At Bigger Appalachian Play
PITTSBURGH-Record-high production from EQT Corp.'s first deep West
Virginia Utica Shale well suggests the
Appalachian region may hold even more
gas than previously thought.
According to the corporation, the well
flowed 72.9 million cubic feet of gas a
day during its 24-hour initial production.
"To the best of our knowledge, this is
the highest reported initial production of
any Utica well," Vice President of Exploration and Production Steven Schlot-

terbeck is quoted in published reports.
EQT says the well was drilled from a
Marcellus Shale pad with a 3,221-foot
horizontal lateral, and it utilized 18 fracture
stages.
The company proposes that these well
results lend credence to the theory that
the dry gas core of the Utica extends beyond southeastern Ohio and beneath portions of the Marcellus Shale in neighboring
West Virginia.
❒

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OCTOBER 2015 107

American Oil and Gas Reporter - October 2015

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