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Energy & Environment

Industrial Commission allows waivers for marginal oil wells

The state Industrial Commission has approved authorizing the Department of Mineral Resources to allow one year waivers for marginal wells – that would be similar to those granted for non-completed wells.

It would allow wells that produce less than 35 barrels a day to be idled for a year. State mineral resources director Lynn Helms says that’s because of the current low oil prices.

“Those wells are producing assets for the mineral owner and the operators," said Helms. "It’s waste to have those wells plugged. Or to force those wells to be put back into production at those low prices is economic waste. It’s bad for the mineral owners.”

Helms says wells shut in because of low prices will probably never be re-drilled.

Industry representatives like that change.

"You don’t want to walk away from those wells," said North Dakota Petroleum Council president Ron Ness. "They’re long-term investments. It’s like a business front – you don’t make them close it because they have a bad week, month, year.”

Helms says the state did the same thing back in 1999 – when sour crude from legacy North Dakota wells brought $3 a barrel. He says at one recent point, North Dakota sour crude was bringing less than that.

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