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Lauren Donovan, Bismarck Tribune, Published December 25 2012

Corral Creek's conundrum

CORRAL CREEK UNIT, near KILLDEER, N.D. – Turkeys were slim pickings for a man hunting in the rough country bordering the Little Missouri State Park north of Killdeer.

After three days of legging it through buttes and ravines, Paul Ziolkowski, of Lansford, bagged one and his wife another, when normally they’d have killed a dozen or more in the same time.

His old hunting grounds are no longer his old hunting grounds.

“The rigs ain’t helping much,” Ziolkowski said, pausing for a moment on his long trek back to the vehicle, hen turkey feathers splayed against his jacket like an oddly drooping headdress.

Where he’s hunted for years is now the Corral Creek Unit. It’s the largest spacing unit for oil well development anywhere in the Bakken oil formations, and it’s a game-changer for everyone associated with it.

The 30,000-acre unit was approved about a year ago by the North Dakota Industrial Commission at the request of ConocoPhillips, which purchased 50 percent of the mineral acres in the unit from Burlington Resources.

The main selling point was that minus the usual constriction of small spacing units, wells could be drilled outside the boundaries of the Little Missouri State Park, a small park made larger by leases with area landowners and favored by horse riders for its trails through the Little Missouri River country.

Oil and Gas Division director Lynn Helms recommended approving the unit and said it would mean no wells on park land, five fewer well pads, 15 fewer tank batteries for oil storage than otherwise and

15 million barrels of oil wouldn’t be stranded.

The concession was that normal setbacks don’t apply and landowners – while compensated for oil roads, well pads and other land uses – lost the right to have a say-so in where and how such construction occurs.

A year after the Corral Creek Unit was signed, landowners have learned one thing for sure: What was approved at a conference table in the Capitol building is different than what is actually happening on the land today. Those fewer wells Helms talked about instead may double in number.

Rick Rice owns three sections inside the spacing unit.

He and others with land and minerals were originally told to expect 83 wells inside the whole unit. Twelve pre-existed the unitization.

That number could go upwards of 200 wells, the company tells him now, he said.

“They didn’t tell us how many wells there would be when it’s done. It’s like sticker shock,” Rice said. “I don’t think they were lying, but there’s more oil in the Three Forks (formation), so now the drilling is increasing.”

Jim Lowry, spokesman for ConocoPhillips, said the company has drilled one successful well into the Three Forks, a formation that underlies the Bakken, in the Corral Creek unit.

He said several more will be drilled in order to evaluate the performance of the wells and all Three Forks wells will be in addition to the planned Bakken wells.

He said no one in the company has formally told Corral Creek landowners how many that might be.

“We never speculate,” Lowry said.

Oil and Gas Division spokeswoman Alison Ritter said there were no permits for any of the initial Bakken wells in the unit plan when it was approved last December.

She said well permits are being issued – 18 have been so far – but any deviance from the unit plan has to be approved as part of the process.

“We expect that plan to be followed closely,” she said. If not, the company must demonstrate a compelling reason and alert the division ahead of asking for a permit, she said.

Lowry said ConocoPhillips works with the Oil and Gas Division “for agency approval every step of the way.”

The company has two rigs drilling in the unit and will move in a third rig next year. He said none of the wells is yet producing oil, though one will be coming on line shortly. He said the company is building pipeline to move oil out of the unit.

Rice lives over the backside of the Corral Creek unit tucked up against the hills with cottonwood and apple trees around the house. Even with increased oil traffic in the neighborhood, he said he’s in no position to complain.

“How can I complain? They’re taking my land, but I’m still benefiting,” thanks to a grandfather who held on to his minerals and passed them along with the land, he said. Even though ConocoPhillips is responsive as it can be, he said, a full quarter-section of his land has been or will be “devastated” by oil well construction.

Candyce Kleeman, her husband, Bob, and two sons all ranch inside the unit on leased and owned land. They don’t own the minerals, though they may benefit financially if a proposed salt water disposal well goes on their land.

On her kitchen table, Kleeman spreads out the detailed maps and notes on the unit she keeps with changes from the original unit plan.

“It would have helped if the plan was more solid. We assumed it was. The changes are what’s causing frustration. This is the problem, because this was the plan when we had the right to bring up our concerns. Now we’re told it was hypothetical,” she said.

She said wells are staked in changed locations and she, too, said the number of total wells could be much higher than on the unit plan approved by the Industrial Commission.

“There’s a change of story every time we turn around,” she said.

Ritter said three new pad locations for eight wells were picked after ConocoPhillips did a site review, but they haven’t been approved yet. The reasons for changing are to stay out of the river bottom land in two instances and rough terrain in the third, she said.

Lowry said the company is trying to minimize impact and surface disruption by changing the locations of some permits away from rugged topography and at the request of landowners.

To the south of the Kleemans a new road runs like a spine through the unit, with oil well pads spaced out on either side, like leaves intersecting a tree branch.

Kleeman is in her pickup and says she had an out-of-body experience the first time she drove the road through country she knows like the back of her hand.

“I couldn’t recognize where I was. This has changed the land so much,” she said.

Kleeman said the 30,000-acre unit – six miles east to west – is much bigger than it needs to be. A couple of larger spacing units would have given ConocoPhillips enough flexibility to avoid siting a well inside the state park, she said.

Her neighbors, Tom and Twila Benz, operate a trail ride concession in conjunction with the Little Missouri State Park operation. They also operate a private campground with cabin rentals.

The entry road to the state park winds alongside their land and Tom Benz said 12 wells will be stretched out along that entry road coming to within a half-mile of the park boundary.

They own the surface, but not the minerals.

He knows “roughly” where the wells will be on his land. “They tell us now on paper, but it changes all the time,” he said. The entry-road wells were to come on in 2014 and now he’s told it’ll be 2015, Tom Benz said.

The company says it will drill and frack those wells in the winter months to least disrupt the park and build their own road in Benz’s pasture to keep the heavy oil traffic off the park entry road.

Twila Benz said as far as she’s concerned, there is no good or bad side to the unit and how it will affect their property.

“We don’t know yet. We have not negotiated,” she said.

Kleemann said it’s been hard to watch the intense development inside the unit, the bulldozers, the rigs and the trucks in an area so unspoiled and quiet all along.

“We protected this land for years. We protect, protect, protect and then ‘Boom.’ Some have said the only ones who can’t determine how our land is used is us,” she said.

As much as anything, she misses being able to hear the nightly coyote chorus back in the hills because of all the drilling noise and being able to walk for miles without seeing another living soul.

“We laugh and we cry. It’s hard,” she said.


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