BEFORE THE CORPORATON COMMISSION OF THE STATE OF OKLAHOMA F ILED OCT 1 1 2017 COURT CLERK'S OFFICE TULSA porpqration CoMMISSION INCREASED WELL DENSITY FOR OF OKLAHOMA THE INDOMINUS REX 16092H-6X, 3H-6X, 4H-6X, 5H-6X, 6H-6X 201702129-T LEGAL DESCRIPTION: SECTION 6, TOWNSHIP 16 NORTH, RANGE 9 WEST, KINGFISHER COUNTY, OKLAHOMA LEGAL DESCRIPTION: INCREASED WELL DENSITY FOR THE INDOMINUS REX 1609 2H-6X, 3H-6X, 4H-6X, 5H-6H, 6H-6X, 7H-6X, AND 8H-6X WELLS (PART OF A SECTION 7, TOWNSHIP 16 NORTH, RANGE 9 WEST, KINGFISHER COUNTY, OKLAHOMA 201702130-T 2H-6X WELL 201702131-T
, Amen* Report of the Administrative Law Judge THE INDOMINUS REX 1609 2H-6X HORIZONTAL WELL 201702132-T FOR THE INDOMINUS REX 1609 3H-6X WELL 201702133-T THE INDOMINUS REX 1609 3H-6X HORIZONTAL WELL 201702134-T. 4H-6X WELL 201702135-T 2
, Amencked Report of the Administrative Law Judge THE INDOMINUS REX 16094H-6X 201702136-T HORIZONTAL WELL NORM, RANGE 9 WEST, FOR THE INDOMINUS REX 16095-H-6X WELL 201702137-T LEGAL DESCRIPTION: THE INDOMINUS REX SECTIONS 6 AND 7, TOWNSHIP 16 2017-2138-T FOR THE INDOMINUS REX 16096H-6X WELL 201702139-T 3
Amended Report of the Administrative Law Judge THE INDOMINUS REX 1609 6H-6X HORIZONTAL WELL 201702140-T 7H-6X WELL 201702141-T THE INDOMINUS REX 1609 7H-6X HORIZONTAL WELL 201702142-T 4
Amended Report of the Administrative Law Judge 8H-6X WELL 201702143-T THE INDOMINUS REX 16098H-6X 201702144-T HORIZONTAL WELL EXCEPTION TO OAC 165:10-3-28 AS TO HORIZONTAL WELL SPACING REQUIREMENTS FOR THE 201702145-T INDOMINUS REX 16092H-6X, 3H-6X, 4H-6X, 5H-6X, 6H-6X, 7H-6X AND 8H-6X WELLS (PART OF A MULTIUNIT HORIZONTAL WELL 5
Amended Report of the Administrative Law Judge AMENDED REPORT OF THE ADMINISTRATIVE LAW JUDGE This is an amendment to the Report of the Administrative Law Judge that issued in the subject causes on September 25, 2017. The only parts of the report that are to be changed by this amendment are page 8, paragraph 4B; and on page 9, paragraph 3; the rest of the initial report is incorporated into this document and remains the same. Page 8, Paragraph 4 B should read as follows: B. 2 of the offsetting wells operated by Almont have a monthly gross income between $12,000 and $14,000; these wells were originally purchased by Almont through the oil and gas asset clearinghouse for more than $750,000. Almont has had 11 to 12 of its wells fractured into over the past 2 to 3 years by various operators; this has resulted in an approximate loss of $60,000 per month plus liability with the response from the fracture treating operators differing from a quick response to the majority (including Newfield being very difficult or non-responsive. Almont has previously shut in its wells to protect against fracture treatments and that has not protected the wells; if the subject applications are granted, Almont plans to bleed the pressure off but then leave its wells open; ultimately, Almont does not think the well equipment on its wells can withstand the pressure that will be the result of the fracture treatments. Because of the losses it has incurred, Almont cannot afford to file a lawsuit in district court against the horizontal well operators; this leaves Almont with no remedy to begin recouping its losses. Page 9, paragraph 3 should read as follows: 3. Historically, this Commission has been charged with the protection of correlative rights. Samson Resources Co. v. Corporation Comm'n, 702 P.2d 19, 22 (Okla. 1985 While the Commission also seeks to prevent waste, it is difficult for the ALJ to reconcile these two ends in the present case. What Newfield seeks is a valuation of a minority owner in the unit versus a majority owner in the unit; adding in the factor of reserve recovery speed by the majority owner is presented as a reason to risk the rights of the minority owners and possibly put them out of business by "killine their vertical wells. Newfield believes that any damages caused to the offsets are best argued in district court as money judgments are outside the Commission's jurisdiction. However, the ALJ believes that is not in the interest of protection of correlative rights; in particular given the Commission's setback rule put in place to avoid situations where wells are adversely affected. Granting an exception to this rule would (according to the Newfield testimony and the past experiences of the protestants, in all likelihood, fly in the face of protecting the rights of interest owners in the unit. Therefore, the ALJ recommends that Newfield abide by the setback rules of the Commission and avoid fracture treating any parts of the lateral that would be closer than 600' to the protestants' wells. For those wells located less than 600'from the proposed laterals and in which either Singer, Almont or TLS is in any way an owner or operator, Newfield should be granted an exception to the 600' setback and be allowed to fracture treat the proposed laterals. While this setback may not completely protect the offsets 6
Amended Report of the Administrative Law Judge from damage by the concurrent completions of the 7 proposed wells, it may afford the wells some type of defense against the fracture treatments in the Newfield wells. Respectfully submitted this 1 lth day of October 2017, KATHLEEN M. MCKEOWN Administrative Law Judge 7