Lease Leads to Protests

Residents in a neighborhood west of Sand Springs are seeking to stop an energy company from drilling on a lease near their homes. They want to stop the company by seeking annexation from Sand Springs.
A month ago, the Sand Springs Planning Commission voted for annexation by a 5-0-1 vote, with one abstention. Once the panel sent that decision to the City Council, the council was ready to OK the annexation when a lawyer for the oil and gas company pointed out there was an active oil lease nearby.
A city ordinance prohibiting oil and natural gas drilling within the city limits was passed in 2003.
The annexation was moved back to the Planning Commission, which will make a decision Sept. 2.
The company, International Energy Corp., is a two-year-old Australian-based company with offices in Houston. IEC purchased the 280-acre lease seeking to rework an oil lease that had been producing off and on for 80 years. One oil well has produced roughly 78,000 barrels of Oklahoma Sweet crude — a highly rated crude similar the benchmark West Texas Intermediate — since 1992.
Another oil well is being deepened and a natural gas well is shut in as IEC waits for a two-mile gas line hook up to a nearby pipeline operated by Scissortail Pipeline. Several other sites hold potential, said Bruce Foster, a senior engineer with the company. The gas well has the potential to produce 500,000 cubic feet over its lifetime.
“We have several other drill sites we consider to be extremely promising,” Foster said.
The lease runs along either side of Weaver Road, which corresponds on a map as 51st Street between 161st West Avenue and 193rd West Avenue. The lease includes property 1/4 mile south of Weaver Road to 1/2 mile north of it. It was part of a package deal IEC purchased in 2007, said Foster.
“We have six other lease groups in Oklahoma,” said John Durkee, another IEC senior engineer. “This is the focus where we wanted to spend the money.
“We bought these leases while they were in production. They were making a small amount of oil. We knew the geology of the area was fractured and faulted with lifts,” Durkee said.
The wells are producing from the Arbuckle formation, which generally is associated with high production. The rule of thumb in the industry is once production is found in the Arbuckle, little or no oil and gas exists below that formation. But, Durkee suspected there might be hydrocarbons deeper in the ground.
IEC ran seismic tests, which proved Durkee’s suspicions true.
“We have three good sites and can get production from six different zones,” he said. “The log on it was impressive.”
Seismic tests on the south side indicate other likely sites. OCC rules prohibit drilling within 67 yards — 200 feet or less than a city block — of a home.
But, performing the seismic tests alerted the neighbors and they became alarmed by the activity. Bruce Foster said IEC talked to the neighbors.
“We talked to all the people before we ran seismic. But, this (reaction) did catch us off guard,” Durkee said.
“Everything was going OK, until we went to perform seismic,” said Foster.
Foster, a spokesman for the homeowners, said residents along West Coyote Trail are worried about pollution and safety.
“All these people have new homes,” Danny Foster said. “We are concerned about salt water spills. Drilling mars the landscape, it damages the land, it leaves a mess and then there’s the noise.”
Both sides agree state law and the Oklahoma Corporation Commission rules protect the rights of mineral rights. Oil companies are allowed to build roads, lay pipe and drill for oil on private land.
Danny Foster does not own the mineral rights on his property.
“I’ve learned a lot from this experience,” he said.
IEC engineers believe there is room for everybody, said Durkee.
“We want to be good neighbors,” he said.
IEC has spent $2 million on the lease — $1 million for site clean up and another $1 million to drill and prepare the wells for production.
The company has cleaned up large oil spills, removed old equipment and improved the lease road.
The lease area could produce oil and gas through 2050, yielding $20 million worth of product, said Bruce Foster.
If the property is annexed, the ordinance banning drilling with the city limits could be rescinded, said City Planner Rachel Clyne.
“That could be an option,” she said. Doing away with the ordinance would require a public hearing.”
Other than passing the drilling ban in 2003, there is no other rule in recent memory, Clyne said.

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