SandRidge Faces Regulatory Action over Earthquake Plan

Sandridge Energy faces legal action from the Oklahoma Corporation Commission’s Oil and Gas Conservation Division (OGCD) for failing to comply with a plan to address earthquakes possibly induced by disposal well operations.

OGCD spokesperson Matt Skinner told Rigzone that the agency’s oil and gas division planned to file in OGCD courts a petition Friday to force Sandridge to comply with OGCD’s plan to change operations of oil and gas wastewater disposal wells in response to earthquake activity.

The legal action stems from Sandridge’s failure to comply with a Dec. 3, 2015 plan issued by OGCD in response to earthquakes in the Medford and Cherokee areas in Oklahoma. That plan called for four disposal wells within 3 miles of the earthquake activity in question to shut in operations and for cuts of 25 to 50 percent in disposed volumes for 47 other wells farther from the activity. The net volume reduction for the changes was 47 percent. Additionally, 28 disposal wells within 10 to 15 miles of earthquake activity were placed on notice to prepare for possible changes in operations.

Chesapeake Operating Inc., Eagle Exploration and Production LLC, Triad Energy Inc. and D&J Oil Company Inc. also were affected by the Dec. 3 plan; SandRidge had the greatest number of wells impacted.

When OGCD issues a plan, the understanding among operators is that compliance is voluntary, but if they don’t voluntarily take action, OGCD will take individual action and modify an operators’ permits, Skinner told Rigzone.

Sandridge has previously cooperated with past actions. Last year, a small operator challenged an OGCD plan; they later dropped the challenge and complied with OGCD standards, Skinner said.

The Wall Street Journal reported earlier this week that Sandridge was resisting calls to shut down disposal wells amid earthquake concerns.

Sandridge told Rigzone it is currently is in discussions with OGCD to address the issue through their established rules and procedures, company spokesperson David Kimmel told Rigzone.

“This is a complex issue, and our commitment is to work in good faith with the Commission to determine appropriate actions are both responsible and based on science,” said company spokesperson David Kimmel in a Jan. 7 email statement. “As our conversation progresses, we will continue to be a reliable corporate citizen, community partner and employer, and as always, place priority on operating safety and responsibly.”

OGCD launched its most recent response to earthquakes Jan. 4, this time in the Edmond, Oklahoma area. The latest plan is focused on five operating Arbuckle disposal wells within 10 miles of the center of the earthquake activity. The plan called for the well within about 3.5 miles of the activity to reduce its disposal volume 50 percent, while the other wells within 10 miles of the activity will reduce volume 25 percent. The plan also called for all Arbuckle disposal wells within 15 miles of the activity to conduct reservoir pressure testing, OGCD said in a statement.

OGCD Director Tim Baker said the plan was part of an ongoing process.

“We are working with researchers on the entire area of the state involved in the latest seismic activity to plot out we should go from here,” said Baker in a Jan. 4 press statement. “We are looking not only at the Edmond area, but the surrounding area as well, including the new seismic activity that has occurred in the Stillwater area.”

Karen Boman has more than 10 years of experience covering the upstream oil and gas sector. Email Karen at kboman@rigzone.com

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