Kevin-Sunburst Oil and Gas Producers Speak Out

By Jessica Sena | Posted: Friday, February 6, 2015 12:07 pm

HELENA, MT – Northern Plains Resource Council (NPRC) has identified several priority bills which they are calling “landowner protections” for this year’s legislative session.

Over the last two weeks, the Senate Natural Resources and House Federal Relations, Energy, and Telecommunications (FRET) Committees have held hearings on the bills, which were met with opposition from several Montana oil and gas producers from Shelby, Kevin, Oilmont, Sunburst, and Cut Bank.

Water Testing

SB 172, a bill sponsored by Sen. Stewart-Peregoy (D-Crow Agency) would require notification to all persons within a half a mile of a proposed well site including information on baseline water testing available at the expense of the well’s applicant. Additionally, SB 172 would require two follow-up tests to be completed once a well is plugged.

Proponents, a majority of which are members with NPRC, said that the public has the right to know the quality of their water before and after drilling operations.

Opponents included the Montana Petroleum Association (MPA), and several oil and gas producers, including Gary (Mac) McDermott, representing the Northern Oil and Gas Association and MCR, LLC; and Patrick Montalban, Mountainview Energy Ltd.

The Montana Bureau of Mines and Geology provides publicly available information from existing statewide monitoring wells on the Ground Water Information Center online. The Bureau has wells in every county of Montana, and receives funding through the Resource Indemnity and Ground Water Assessment account paid into through natural resource taxes paid by industry.

Additionally, DEQ and DNRC have conducted recent tests around the state in “high risk” areas where oil and gas activity is prevalent, with grant money appropriated by the Legislature in 2013.

Bonding

SB 173, a bill to increase bonding and impose idle well fees, carried by Sen. Christine Kaufmann (D-Helena) was also heard in Senate Natural Resources. Kaufmann and proponents, including NPRC members, the Montana Environmental Information Center, and Montana Audubon, claimed that wells needed to be properly indemnified, and that increased bonds were necessary to ensure available resources for the proper plugging of wells.

Opponents from north central Montana included Duane and Marilyn Enneberg, Rick Rice, Gus and Billiette Coolidge, Lucille Knap, Mac McDermott, and Patrick Montalban, all representing small oil and gas businesses. MPA and the City of Shelby also testified against the bill, as well as representatives from MDU and Continental Resources.

Increased bonds and idle well fees (which the bill does not define) would effectively shut down development of marginal (stripper) & wildcat wells, said opponents. Low oil prices have already affected the economics of drilling for all operators.

Jim Halvorson, Division Administrator of the Board of Oil and Gas, was present for all bills as an informational witness. Halvorson said that the number of abandoned wells has been on the decline, with only fifty eight remaining on the Board’s file. The oil and gas account has approximately $7 million dollars available, with additional financial resources in the RIGWA account which is capped (per a constitutional requirement) at $100 million dollars annually.

Setbacks

SB 177, carried by Sen. Mary McNally (D-Billings) would establish setbacks from well sites. Using the definition of “inhabitable real property”, wells would have to be 1,000 ft. from property lines and all surface water, lest the surface owner waive the requirement. Several amendments to the bill have since been added, including a provision intended to disallow any interference with mineral rights.

Supporters of the bill, all of the same supporters for the previously stated bill, claimed that it was a bill for property rights, adding that several other oil and gas states have passed setback rules.

Opponents, namely oil and gas producers and mineral owners, claimed that the bill was a regulatory taking of mineral rights, that it lessened the economics of drilling wells, even preventing vertical drilling in many areas, and that it conflicted with existing statute on the designation of spacing units.

A spokesperson for the MPA said that Montana’s oil and gas production pales in comparison to states with setback rules, with Montana ranking 12th in oil production, and accounting for roughly 1% of total U.S. oil production. Setback rules proposed in SB 177 would be the most restrictive of any that have been imposed in other states.

The Board’s Jim Halvorson and Monte Mason for the DNRC rose as informational witnesses.

The State owns roughly 5 million acres in surface rights and 6 million acres in mineral rights. Should the bill, which has been tabled, be revived by a blast motion and passed, mineral owners and State Trust Lands could see a significant decline in production and revenue.

Frac Disclosure & Notification

HB 243, a bill to require a 45 days pre-frac notification and full disclosure of frac fluid chemicals, was sponsored by Rep. Mary Dunwell (D-Helena). The Montana Board of Oil and Gas Conservation (BOGC) promulgated rules in Aug. of 2011 to require prior and post fracturing disclosure of chemicals. Disclosure is available to the public through FracFocus.org.

Opponents stated that the notification requirement was in addition to existing rules and statute for notices, and said that delaying completion operations (fracturing) may jeopardize the process altogether.

Well owners do not always know whether or well will be fractured. Well stimulation activities take place after the drilling. The notice requirement may also open the door for interveners to unnecessarily delay or prevent fracturing, which is a process well owners negotiate with service providers who perform the fracturing.

Opponents also said that there was no demonstrated deficiency with existing rules and regulations.

In November, the USGS study concluded that oil and gas activities in the Williston Basin (Bakken) had not affected groundwater quality. Montana has not had a single case of groundwater contamination by fracturing discovered or reported to the Board by any regulatory agency in the more than 60 years that the process has been used in the state.

Pits

HB 253, a bill to prohibit earthen pits and require closed-loop [drilling] systems, was heard most recently in House FRET. Rep. Virginia Court (D-Billings) was the bill’s sponsor, and said that closed-loop systems were more environmentally beneficial and economically feasible than alternative methods which include earthen pits for drill cuttings.

The bill attracted resounding opposition from Shelby’s Mac McDermott for MCR, LLC. and the Northern Oil and Gas Association, Roy Brown for FX Drilling, John Finstad of Keesun Corporation, Garth Owens of Gasco Drilling, MPA and MonDak Utilities.

Montana’s drilling operations and geology vary considerably around the state, and while many Williston Basin operators have elected to use closed-loop systems in lieu of pits, doing so would not be economic for most small producers or wildcat and exploratory wells. Opponents claimed that shallow wells which are drilled with freshwater rather than salt or oil based mud use pits which are strictly regulated by the BOGC. The BOGC does have the regulatory authority to prohibit the use of pits if a factual situation warrants.

House FRET is expected to vote on HB 253 Monday, February 9th at 3:00 pm.

All other bills have been tabled, but may be brought to life by a blast motion with a majority vote on the floor of their respective sponsor’s chamber. In that event, the bill would be debated and voted on by the entire body of either the Senate or the House. Such motions have until the transmittal deadline, February 26th.

Jessica Sena, a former contributor to the Sun Times, now serves as Communications Director with Montana Petroleum Association.

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Rep. Zinke Addresses Joint Session; Speaks Of Multiple Use On Federal Lands

By Darryl L. Flowers | Posted: Tuesday, February 3, 2015 5:15 pm

Montana’s U.S. Representative, Ryan Zinke addressed a joint session of the Montana Legislature last week.

In his opening, watched via a video link, the congressman spoke about the bureaucracy in Washington, DC, telling the story of his attempt at hanging a picture in his office. Zinke said, “there was a number to call for that,” and when he called the number, “three people show up. We are drowning in bureaucracy.”

Rep. Zinke spoke about public lands, saying, “Our public lands are sacred. Public access and public lands and Multiple Use are part of our heritage. But, so is the mismanagement, and that’s when we have to take a stand.”

“Multiple Use” refers to the Multiple-Use Sustained-Yield Act of 1960, in regards to National Forests.

The congressman said that part of the problem with public lands is that the authority of local Forest Service staff has been  “stripped away”

For more about Rep. Zinke’s address, and other news from the Montana Legislature, see http://www.fairfieldsuntimes.com/news/article_cf8f7f12-abf0-11e4-b1e8-177a26ff5311.html

MOONCOR COMPLETES ACQUISTION OF 219,000 ACRES OF OIL AND GAS LEASES IN AREA

Posted: Thursday, January 29, 2015 3:51 pm

According to a press release issued by Mooncor Oil & Gas Corp. earlier today, the company has completed the purchase of 320 sections of oil and gas leases in Pondera and Teton Counties in Montana. While the release does not mention the name, it is believed that Mooncor has acquired the leases of Primary Petroleum, based on company filings and reports on financial websites.

The Mooncor release reads:

TORONTO, ONTARIO — Mooncor Oil & Gas Corp. (“Mooncor”) (MOO) announced today that its wholly owned subsidiary, Mooncor Energy Inc. (“MEI”), has completed the acquisition (indirectly through the acquisition of a Montana incorporated company) of oil and gas leases and related data over approximately 320 sections (net acres of 219,000) in the Pondera and Teton Counties in Northwestern Montana USA (the “Property”). Mooncor and the sole shareholder of the vendor of the shares of the Montana company acquired share a common director, however the acquisition is not a “related party transaction” as defined under Multilateral Instrument 61-101. The acquisition was previously disclosed on August 14, 2014 and October 16, 2014. MEI will pay the vendor a 1% gross overriding royalty and assume its working interest share of the reclamation costs relating to the previous drilled wells and the ongoing lease payments on the Property. Further details of the Property are disclosed in the August 14, 2014 news release.

In addition, Mooncor provides a further update on its February 16, 2012 news release on the closing of its previously announced disposition (the “Transaction”) by MEI of an interest in two oil leases spanning 80 acres located in Lloydminster, Alberta to Madeira Minerals Ltd. (“Madeira”) (nex: MDE. H). MEI and Madeira have entered into a letter of commitment and amended and restated purchase agreement to affirm the parties’ intentions regarding the Transaction, and to recognize improvements made on the property by MEI since the Transaction was first announced. A major work-over of Well 3-28 and minor work-over of Well 4-28 were completed in 2012, in addition to required environmental remediation work. Madeira is a capital pool company and the Transaction is intended to constitute Madeira’s “qualifying transaction” under Policy 2.4 of the TSX Venture Exchange (the “Exchange”). Completion of the Transaction still remains subject to approval of the Exchange, completion by Madeira of a concurrent private placement for aggregate gross proceeds of $1.2 million, and compliance by Madeira with the policies of the Exchange related to completion of a qualifying transaction.

Mooncor Oil & Gas Corp. is a junior oil and gas exploration company. Mooncor holds interests in lands in the Muskwa/Duvernay liquids rich shale gas area in Hamburg, Alberta, and in southwest Ontario where the focus has been on conventional oil and gas opportunities.

Anadarko E&P Onshore Re-permits Two Bakken Wells in Toole County

By Darryl L. Flowers | Posted: Tuesday, January 27, 2015 1:00 pm

1/12/2015 To 1/23/2015

New Locations – Horizontal Wells

In Richland County, Whiting Oil and Gas Corporation permitted a Bakken Formation well, the Hay Creek Federal 24-31-4H. The Hay Creek has a surface hole location (SHL) at SE SW 31-25N-58E (300 FSL/1740 FWL) and a probable bottom hole location (PBHL) of 21,803 feet at NE NE 30-25N-58E (240 FNL/660 FEL).

Re-Issued Locations

In Richland County, three re-issued permits were approved for wells that will be operated by Whiting Oil and Gas Corporation: the State 43-16-2H, with an SHL at NE SE 16-24N-59E (2330 FSL/300 FEL) and a PBHL of 20,234 feet at SW NW 17-24N-59E (2460 FNL/240 FWL); the State 43-16-3H, which has an SHL at NE SE 16-24N-59E (2285 FSL/300 FEL) and a PBHL of 20,157 feet at NW SW 17-24N-59E (1740 FSL/240 FWL) and the State 43-16-4H, with an SHL at NE SE 16-24N-59E (2240 FSL/300 FEL) and a PBHL of 20,680 feet at SW SW 17-24N-59E (660 FSL/240 FWL).

In Toole County, two re-issued permits were approved for wells to be operated by Anadarko E&P Onshore, LLC: the Simmes Ranch 3603-01-41H has an SHL at NW NW 1-36N-3W (450 FNL/245 FWL) and a PBHL of 7,492 feet at NE NE 1-36N-3W (400 FNL/330 FEL); the Simmes Ranch 3603-02-11H has an SHL at NE NE 2-36N-3W (400 FNL/880 FEL) and a PBHL of 6,875 feet at NW NW 2-36N-3W (400 FNL/330 FWL). Both wells will target the Bakken Formation.

Completions

In Blaine County’s Bowes Field, Citation Oil & Gas Corp. reported the completion of the Bowes Sawtooth Unit B208H. The Sawtooth Formation horizontal well has an SHL at NW NW 8-31N-20E (750 FNL/760 FWL) and a bottom hole location (BHL) of 6,217 feet at NE SE 6-31N-20E (1407 FSL/1310 FEL). The reported initial production was 15 barrels of oil per day (BOPD) and 400 barrels of water per day (BWPD).

In Carbon County, Energy Corporation of America reported the completion of the Hunt Creek 1-H, located at SW SW 7-8S-23E (741 FSL/805 FWL). No initial production numbers were reported.

In Dawson County’s Deer Creek Field, Legacy Reserves Operating LP reported the completion of the Deer Creek 8-22, located at SE NE 22-17N-53E (2050 FNL/660 FEL). The Red River vertical well reported an initial production of 321 BOPD, 5,000 cubic feet of gas per day and 1,215 BWPD.

Three Bakken Formation wells were reported as completed in Richland County.

Whiting Oil and Gas Corporation reported the completion of two of the wells. The Sundheim 21-27-3H, with an SHL at NE NW 27-25N-58E (440 FNL/1980 FWL) and a BHL of 20,478 feet at SW SE 34-25N-58E (245 FSL/1907 FEL). The Sundheim 21-27-3H recorded an initial production of 1,293 BOPD, 658 thousand cubic feet of gas per day (MCFPD), and 2,807 BWPD. The Sundheim 21-27-4H has an SHL at NE NW 27-25N-58E (395 FNL/1980 FWL) and a BHL of 21,497 feet at SE SE 34-25N-58E (241 FSL/572 FEL). No initial production rates were reported.

Wrapping up the three Richland County completions is the Babka 3-12H, operated by Continental Resources Inc. The Babka has an SHL at SW SW 12-24N-52E (325 FSL/735 FWL) and a BHL of 15,594 at 1-24N-52E (237 FNL/690 FWL). The Babka reported an initial production of 595 BOPD, 125 MCFPD and 281 BWPD.

Abandoned Wells

In Sheridan County, final abandonment procedures were approved for the Ostby 11-35, located at NW NE 35-31N-58E (825 FNL/1517 FEL). Omimex Canada, Ltd. was the operator of record.

Darryl L. Flowers is the publisher of the Sun Times in Fairfield, Montana, www.fairfieldsuntimes.com, and can be reached at publisher@fairfieldsuntimes.com

Vecta Permits Two Amsden Wells In Musselshell County

By Darryl L. Flowers | Posted: Tuesday, January 13, 2015 12:49 pm

1/5/2015 To 1/9/2015

New Locations

In Musselshell County, Vecta Oil & Gas, Ltd. was approved to drill two Amsden Formation wells. The Inflow Jet 43-2 is located at NE SE 2-7N-30E (1805 FSL/709 FEL) and a proposed depth of 6,856 feet; the Cold Pool 31-34 is located at W2 NE 34-8N-31E (1320 FNL/1945 FEL) and has a proposed depth of 6,717 feet.

Completions

In Fallon County’s East Lookout Butte Field Denbury Onshore, LLC reported the completion of two Red River Formation wells.

The ELOB 761 24-19SH has a surface hole location (SHL) at SE SW 19-7N-61E (500 FSL/1560 FWL) and a bottom hole location (BHL) of 17,752 feet at NW NW 36-7N-60E (680 FNL/553 FWL). The well recorded an initial production of 203 barrels of oil per day (BOPD), 47 thousand cubic feet of gas per day (MCFPD) and 352 barrels of water per day (BWPD).

The ELOB 33-04NH 760 has an SHL at NW SE 4-7N-60E (2085 FSL/2195 FEL) and a BHL of 16,890 feet at SW NE 35-8N-60E (1982 FNL/2060 FEL). The initial production was 2,400 BWPD.

Abandoned Wells

In Daniels County, final abandonment procedures were approved for the Wescoe 34-7H-B, located at SE NE 34-36N-47E (2300 FNL/210 FEL). The operator of record is Apache Western Exploration LLC.

Converted to Injection

Two wells operated by Denbury Onshore, LLC were approved for conversion to injection: in Fallon County’s East Lookout Butte Field Unit, the ELOB 14-25NH located at SW SW 25-7N-60E (400 FSL/500 FWL); in Wibaux County’s Pine Field, the Unit 21-11AH located at NE NW 11-11N-57E (500 FNL/2400 FWL).

Darryl L. Flowers is the publisher of the Sun Times in Fairfield, Montana, fairfieldsuntimes.com, and can be reached at publisher@fairfieldsuntimes.com

Billings Firm Fined $5,000 By Board of Oil and Gas For Fracking Toole County Wells

By Darryl L. Flowers | Posted: Monday, December 15, 2014 3:52 pm

• Failed to notify Board prior to fracking

American Midwest Oil & Gas Corporation of Billings, Montana has been fined $5,000 by the Montana Board of Oil and Gas Conservation (BOGC) for failing to notify the agency before undertaking fracturing of two wildcat wells in Toole County.

The company fracked the Koenig  12-33, which has a surface hole location, or SHL, at SW NW 33-35N-1E (2250 FNL/400 FWL) and the Koenig 32-32, which has an SHL at SW NE 32-35N-1E (2250 FNL/2150 FEL).

Both wells are verticals that were permitted to the Duperow Formation one year ago. The wells had a permitted depth of 3,200 feet. The wells are listed as oil wells. Their current status is “spud.”

American Midwest was fined $2,500 for each well.

The company operates four wells in Montana, according to the BOGC database, including the two Koenig wells. The other two wells, the Johannsen 1-19 and the Stewart  10-18, are gassers located in Toole County’s East Kevin Gas Field.

A Passion For The Bakken: PR Rep Brings Positivity To The Field

By Marissa Hall Shale Plays Media | Posted: Tuesday, December 9, 2014 5:36 pm

Sometimes the oil and gas industry has difficulty finding positive voices. But two years ago, Jessica Sena brought it to the industry. “I saw the Bakken boom as something so enormously positive and exciting, especially for younger people like myself, ” she said. And she is successfully becoming a voice for the positivity she sees in the industry through the Montana Petroleum Association (MPA) and Northern Oilfield Services, Inc. (NOSI). According to Sena, “working as an independent communications director and consultant for both an industry association and a small oilfield service company is a dream come true. ”

Sena didn’t realize how passionate she was about the industry until relatively recently. She grew up in Montana and Nebraska, and started her college career at Nebraska Wesleyan University. But before she finished, she decided to come back north to finish her degree through Dickinson State University. She made the drive from Grassy Butte every day, an hour drive each way, and finally graduated in 2009 with a Communications and Public Relations degree. But in 2009, there wasn’t much economic development. The boom hadn’t really exploded yet.

Sena moved back to Montana and worked as a ranch hand and housekeeper, followed by a string of odd jobs. After spending some time as a campaign manager and communication director, she realized how fascinating she found natural resource policy. That’s when she reached out to the MPA in 2012. “I saw the opportunities being created by oil activity for lower and middle class individuals and families especially, and at the same time recognized the need for positive industry communication and education, ” she explained. Sena was allowed a part-time, contracted position as an independent communications adviser. Like the boom, though, her role in the MPA and the oil industry only continued to grow, and she is still with the MPA today.

It took a while for Sena to find her footing and become “the biggest oilfield fan there is, ” as she dubs herself. “At first I used Twitter so share news articles, economic findings, etc. with very little of my own views, ” she said. “I didn’t offer my own comments. ” This approach earned her media and industry followers, but it wasn’t capturing the audience she wanted. But now she has embraced her voice. Her Twitter account (@MTPetroleum) is full of loud and proud comments about the oilfield and the people who make it.

Because she’s an independent contractor, Sena has the freedom to broadcast these views without repercussions from MTP or NOSI. “I have the freedom to do and say just about anything, ” she rejoiced. “No one’s scripting me. ” But sharing her views, as positive as they are, came with backlash. “I’ve often been called a hired gun, scum of the earth, a company shill, and other names, ” she recalls. “The insults come with the territory. There are many activists who use anonymous accounts to harass those in the oil and gas industry in particular.”

But she’s started to hear “thank you” in the mix, too, and for Sena, that’s what makes it all worth it. She keeps her focus on bringing positivity into the conversation. “I realized that it truly was more effective to remain positive no matter what,” she says. Sena keeps to this strategy, even when dealing with her more difficult opponents. “Once I invited two of my more frequent adversaries out to coffee so that I could ‘look [them] in the eye when we talk about these important issues. ’ Both took me up on the offer, and neither has criticized anything I’ve posted since! ”

Sena’s sphere of influence in the industry is growing. “Two months ago I was hired by [NOSI], and my true passion was found after working in the field with the crew, ” she said. “It was really eye opening to actually get dressed up in [personal protective equipment] and see things up close and personal. “And now it’s what she looks forward to every month.

Spending time in the field sets Sena apart from other PR representatives. “I actually spend time in the field, have gauged oil tanks, greased polishing rods, and dedicated far more time to reaching out to the men and women in the field to make sure I’m getting the facts right and really speaking their language,” she explains. “It’s important to me to empower them, as much as I educate the public and elected officials about the industry. ”

“These days, ” Sena says, “the natural resources development industry needs a social license to operate.” Fracking debates across the nation have sparked bans in several cities—Los Angeles, California; Denton, Texas; and Athens, Ohio—and other regions are working toward them. St. Tammany Parish is fighting hydraulic fracking in the courtroom while cities in Colorado work to keep their moratoriums by seeking approval from voters. “Public opinion is shaping public policy, ” Sena says. So she works every day to improve the public’s attitude about fracking by giving the Bakken boom a face. Tahnee Peppinger, Miss Montana USA, learning what it’s like to work in the Bakken. (Photo courtesy of Jessica Sena via the Montana Petroleum Association Facebook page)

Sena’s work is also having an amazingly positive impact in NOSI. Since she joined the company and started working with crew in the field, the owner, Bart Horner, has commented on the rise in positivity he sees in his employees. “I think my energy has been a dose of much needed medicine in an industry that is often the target for criticism and negativity, ” Sena said happily.

Sena recently returned from a week in the field with Miss Montana USA, Tahnee Peppenger. She documented the experience through photos and videos posted on the various social media pages she’s involved with through MPA and NOSI.

Outside of work, Sena is the lead singer in “The Essentials, ” a band which plays at a brewery in Helena once a month. Despite her love of the burly lifestyle in the oilfield, she also takes time to shop and spend time in art galleries. Lately, though, Sena says her favorite pastime has quickly become spending time with the men and women of the oilfield. She even cooked Thanksgiving dinner for the crew of a drilling rig, and she wouldn’t have it any other way.

Thanks to our friends at Shale Plays Media for reprint permission. Visit them at www.bakken.com, or read the original article at http://bakken.com/news/id/227226/passion-bakken-pr-rep-brings-positivity-field/