Posts

Mick Thomas

Division Administrator, Oil & Gas

Secretary to the Oil & Gas Conservation Commission

This update was sent to the Commission on Saturday, November 2.

Current Items:
Upcoming OGCC Regular Meeting
Upcoming Oil & Gas Town Hall
Well Activity – Plug and Abandon, and Top Job
Allocation Investigation
Severance Taxes
News Article(s) of Interest

Upcoming OGCC Regular Meeting
The next regularly scheduled OGCC meeting is Wednesday, November 13 @ 1:00 PM at the Capitol Building in EW42. More Information can be found on the Home page and the Commission Meetings page of the OGCC Website.

Upcoming Oil & Gas Town Hall
Our quarterly Town Hall meeting is Wednesday, November 6 @ 5:30 PM at the Payette County District Courthouse. There will be a general update on oil and gas activities provided to the community, followed by a Q&A session.

Well Activity

Plug and Abandon
The past two weeks have seen a significant amount of well closure activity. The following wells have been plugged as of Saturday, November 2, 2019:

• ML Investments #1-10 (Inside LW Facility)
• Island Capital #1-19
• Espino #1-2
• White #1-10
• State #1-17
• Korn #1-22
• Tracy Trust #2-3

The ML Investments #1-10 and Island Capitol #1-19 had a deadline of December 2019 while the other five wells were to be done in October 2019. The removal of the wellheads and some additional tasks are schedule for next week, which will complete the abandonment requirements. The completed P&A work of these seven wells brings the operator into compliance with the terms of the P&A permits. IDAPA 20.07.02 states the plugging report shall be submitted to the Department within 30 days of the operation.

Top Job
The Department was notified last July that remedial cementing would be done on the Fallon 1-10. This is commonly called a “Top Job” and is performed prior to well production if needed. Below is a brief explanation of the process and reason taken from “better-cementing-for-all.org”:

Since the first casing is cemented in weak or unconsolidated formations, losses are common or excess cement may not have been enough.
This causes the top of cement to be below surface. In these cases, “top jobs” may be performed to ensure good cement at surface to support the casing.

The operator noticed the Department about their intent in July. They ultimately chose to delay the work until crews were on hand to do the P&A work on the wells noted above. Some prep work for the Top Job has been done on the Fallon 1-10 and the Top Job is scheduled for next week. IDL staff was on site for the entire time and will continue to monitor operations closely.

Allocation Investigation
The Department and High Mesa Holdings (HMH) has resolved volume discrepancies as a result of the Allocation Investigation. HMH is compiling and providing monthly plant volumes by well for natural gas liquids (NGLs). This process will take a few weeks for HMH to complete, but some data is already coming in. We will provide the complete data package to the Commission once received.

Severance Taxes
The Department is continuing to receive excellent cooperation from the Tax Commission regarding severance tax. HMH has hired an independent party to manage their accounting, and that company is working with the Tax Commission to ensure severance tax revenue is accurate.
We are reviewing calendar year 2019 as well as fiscal year 2020 revenue with the Tax Commission, and will provide a summary of this revenue to the OGCC at the November meeting.

News Article(s) of Interest

Weld County Colorado reacts to new state guidelines:
https://www.greeleytribune.com/news/weld-oil-and-gas-energy-department-reacts-to-state-agencys-new-oil-and-gas-regulations/?utm_medium=Social&utm_source=Facebook#Echobox=1571767189

In Western States other than Idaho, Thousands of ‘orphan wells’ spark safety, cleanup fears: (PDF).

The town hall meeting will be held on Wednesday, November 6, 2019 at 5:30pm (MT).  Please see the Town Hall Meetings page for more information.

High Mesa Holdings/AM Idaho began plug and abandon work on the following seven wells on Wednesday, October 23.

• ML Investments #1-10 (Inside LW Facility)
• Island Capital #1-19
• Espino #1-2
• White #1-10
• State #1-17
• Korn #1-22
• Tracy Trust #2-3

All seven wells should be plugged and abandoned by the end of the month. High Mesa Holdings/AM Idaho’s completion of plug and abandon operations for the above wells will bring them into compliance with the terms of their permit. This plug and abandon work is standard procedure for wells that have been shut in for an extended amount of time.

Mick Thomas

Division Administrator, Oil & Gas

Secretary to the Oil & Gas Conservation Commission

This update was sent to the Commission on Saturday, October 19.

Current Items:
Town Hall Rescheduled
Well Activity – Plug and Abandon
News Article(s) of Interest

Town Hall Rescheduled
The Oil and Gas Town Hall scheduled for Tuesday, October 22 has been moved to Wednesday November 6th. We have made arrangements for the change with commissioner Shigeta and Payette County. Please see the media release.

Well Activity – Plug and Abandon
On Thursday, October 17, 2019 the Department noticed High Mesa Holdings / AM Idaho that the 12 month period allowed to plug and abandon wells in the Hamilton Field had expired and that they are currently out of compliance. These five wells are the Espino #1-2, White #1-10, Korn #1-22, Tracy Trust #3-2, and State #1-17.

The notice provides two options to the operator:
1. Notify the department that plugging operations have commenced by October 26, 2019.
2. If P&A has not commenced by the above date, the operator is to provide the following by Friday, November 1, 2019:
a. New applications to plug and abandon the 5 named wells.
b. $500 application fee for each well per Idaho Code § 47-316.
c. Inactive Individual Well Bonds for each of the five named wells per IDAPA 20.07.02.220.03 and IDAPA 20.07.02.220.04. As authorized by IDAPA 20.07.02.220.04, the Department is setting the individual bond rate at $75,000 per well.

Note: The above wells were drilled by Bridge Energy during their initial exploration of the field approximately 10 years ago. Other than the State #1-17 none of the wells ever produced in economic quantities.
I’ll keep the Commission informed as this process evolves.

News Article(s) of Interest
Plan for drilling and mining on sage-grouse land blocked
https://www.cpr.org/2019/10/17/trump-admins-plans-for-drilling-mining-on-sage-grouse-lands-blocked/

Governor, House Speaker respond to Judge Winmill’s sage-grouse ruling

The August 2019 monthly report is now available. Please see the Monthly and Annual Reports page for more information.

The town hall meeting will be held on Wednesday, November 6, 2019 at 5:30pm (MT).  The meeting was originally planned for Oct. 22, but was rescheduled due to a schedule conflict. Please see the Town Hall Meetings page for more information.

Mick Thomas

Division Administrator, Oil & Gas

Secretary to the Oil & Gas Conservation Commission

This update was sent to the Commission on Friday, October 4.

Current Items:
Special Meeting – outcome
Class II Permit Status
Town Hall Meeting
News Article(s) of Interest

Special Meeting – outcome
On September 25, 2019, the Oil and Gas Conservation Commission voted to adopt the proposed rule as the pending rule for IDAPA 20.07.02 – Rules Governing Conservation of Oil and Natural Gas in the State of Idaho and authorize the Department to submit a Notice of Adoption of Pending Rule consistent with that adoption. Please see the Rulemaking page for more information.

Class II Permit Status
On Monday, September 23, AM Idaho submitted the documents for the aquifer exemption to the Environmental Protection Agency. The following documents were received by the EPA:
• A cover letter signed by Scott Ricks
• 7520-6 Permit Application for a Class II Well
• EPA – Underground….Application number ID2D001-A
• Aquifer Exemption Request Willow Sands – AM Idaho
• Flash drives containing the folder structure.
The Commission and the Department are not a party to this application and we do not have these documents, however we are following the process closely.

Town Hall Meeting
Our next oil and gas town hall meeting will be held Tuesday, October 22, 2019 at the Payette County District Courtroom at 5:30pm.

News Article(s) of Interest
Natural gas pipeline and terminal decision delayed in Oregon:

Renewable energy requires mining investment:

New Mexico Land Office gets $1.5M from royalty audit – a 0.2% increase in oil and gas revenue for NM.
https://www.rdrnews.com/2019/09/28/land-office-gets-1-5-million-from-royalty-audits/

Four Pipeline fights to watch this term: (PDF).

On Friday, September 27, the Department received confirmation that the Environmental Protection Agency (EPA) received hard copies of the following from AM Idaho regarding the class II permit aquifer exemption:

• A cover letter signed by Scott Ricks
• 7520-6 Permit Application for a Class II Well (2x)
• EPA – Underground….Application number ID2D001-A (spiral bound, 2x)
• Aquifer Exemption Request Willow Sands – AM Idaho (spiral bound, 2x)
• Flash drives (2x) containing the folder structure.

These documents were received on Monday, September 23, and are in the possession of the EPA Region 10 office.

The receipt of these documents provides a complete Class II injection well (UIC) application for the EPA. This will allow the EPA to move forward with their evaluation of the class II permit application from AM Idaho.

The Commission and the Department are not a party to this application and we do not have these documents, however we are following the process closely.

On September 25, 2019, the Oil and Gas Conservation Commission voted to adopt the proposed rule as the pending rule for IDAPA 20.07.02 – Rules Governing Conservation of Oil and Natural Gas in the State of Idaho and authorize the Department to submit a Notice of Adoption of Pending Rule consistent with that adoption. Please see the Rulemaking page for more information.

Mick Thomas

Division Administrator, Oil & Gas

Secretary to the Oil & Gas Conservation Commission

This update was sent to the Commission on Saturday, September 21.

Current Items:
Special Meeting
IGS Advisory Board
Class II Permit Status
Transportation – Purchaser Reports
Alta Mesa Files Bankruptcy
News Article(s) of Interest

Special Meeting
The Oil and Gas Conservation Commission will be holding a special meeting on Wednesday, September 25, 2019 at 10:00am at the Idaho Department of Lands Boise Staff Office to present the pending rule for IDAPA 20.07.02 Rules Governing Conservation of Oil and Natural Gas in the State of Idaho. See the Commission Meetings page for more details.

Idaho Geological Survey Advisory Board
At the Land Board meeting last Friday, the Land Board appointed me to be their designated representative on the Idaho Geological Survey Advisory Board.
The Idaho Geological Survey (IGS) is a special program administered at the University of Idaho, under the authority of the Board of Regents of the university. IGS is the lead state agency for the collection, interpretation, and dissemination of geologic and mineral data for Idaho. Such information is acquired through field and laboratory investigations by IGS staff, and through cooperative programs with other governmental and private agencies.
The Advisory Board is a non-regulatory body that works with the IGS Director to formulate a strategic plan to accomplish the mission of the Idaho Geological Survey. The Advisory Board and the IGS Director ensure the actions of IGS are in line with their mission while following direction provided in statute. The Advisory Board also aids IGS research-based programs.

Class II Permit Status
On Monday, September 9, 2019 the EPA sent notice to AM Idaho that they would move toward the a denial of AM Idaho’s UIC permit unless an aquifer exemption request package was received by September 27, 2019. AM Idaho responded that they are working to provide a complete package and did not anticipate a problem meeting the September 27th deadline.

Transportation – Purchaser Reports
In August of 2018 Alta Mesa Resources notified the department that they would be selling liquids out of state and would cease providing purchaser data on liquids, however, ARM Energy Management LLC would continue to be the purchaser of gas from AM Idaho.
The Oil and Gas division has been in contact with known out of state purchasers of the Idaho liquids. Thanks to the cooperation of Big West Oil in Salt Lake, the division has received purchaser reports for condensate purchased by Big West. The condensate purchaser reports for 2019 are now posted on the OGCC website.
The department is continuing to work with a Canadian company, NGL supply, to gain purchaser data for the natural gas liquids sold from the highway 30 facility

Alta Mesa Files Bankruptcy
On September 12th, 2019 the public company Alta Mesa Resources filed a voluntary petition under Chapter 11 of the United States Bankruptcy Code.
http://altamesaresources.irpass.com/profiles/investor/ResLibraryView.asp?ResLibraryID=91280&GoTopage=1&Category=2049&BzID=2078&G=1070 
Alta Mesa Resources (AMR) formerly owned a majority interest in Alta Mesa Idaho (AM Idaho). This past spring, that majority interest was purchased in its entirety by a newly formed private company named High Mesa. The leases held by AM Idaho were included in the sale.
I’ve received some questions from the media and public at large regarding if and how the AMR bankruptcy could impact the Idaho operations. Since AMR and High Mesa are independent of one another, the bankruptcy should not have a direct impact on our field, or other operations owned by High Mesa. Both the Land Board audit and the allocation investigation being conducted by the Commission involve AM Idaho.
If you have further questions please call or email. I’m happy to discuss.

News Article(s) of Interest
Alta Mesa Resources Bankruptcy:

https://www.bizjournals.com/houston/news/2019/09/12/houston-energy-co-led-by-james-hackett-files.html

Drone attack on Saudi oil field:
https://iranintl.com/en/world/iran-responsible-attack-saudi-oil-facilities-rick-perry
https://www.ogj.com/general-interest/economics-markets/article/14039973/oil-price-spike-likely-shortlived-after-saudi-drone-attack

Regional information:
https://www.govtech.com/fs/infrastructure/Pacific-Northwest-Facility-to-Study-Grid-Security-Resilience.html