An unusual case for the North Dakota Industrial Commission.
An oil company had asked the Commission for permission to sell 800 barrels of oil taken from a spacing unit the company was not authorized to explore. State mineral resources director Lynn Helms says Cadeco was drilling from a neighboring spacing unit. But because Cadeco was not authorized to take oil from that unit, it became illegal oil. And the Commission voted to seize the oil and sell it, with the proceeds going to the state’s general fund.
Helms says it’s an expensive lesson.
"They're out $8 million - $9 million for that well bore," said Helms. "And then they're out the value of the oil -- about $25,000."
The oil is in two 400 barrel tanks, store on site.
"The tanks will be sealed, and the state will take possession of the oil," said Helms. "It requires, I believe, a sheriff's sale."
That means the oil will be sold on the courthouse steps.
Helms says the well has been plugged.
"They were not ordered to abandon it," said Helms. "They were ordered to repair the well so it could produce legally. And in the process of trying to do that, they damaged the well so badly that it couldn't be repaired. So they had to plug it."
Helms says he's not aware of any other incident like this.
