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Amy Dalrymple, Forum News Service, Published January 28 2014

ND Industrial Commission to consider McKenzie County mega oil drilling unit

BISMARCK – An oil company’s proposal to develop about 25,000 acres in McKenzie County as one large drilling unit will come before the North Dakota Industrial Commission on Wednesday.

QEP Energy Co. presented on Nov. 13 to the Industrial Commission Oil and Gas Division about its plan to develop the area as one large unit, known as the Grail-Bakken Unit. The company says its plan can recover more oil while reducing the impact on the land.

At the hearing in November, mineral owners expressed concerns about giving up rights as surface owners and the fairness of the proposal to individual owners.

If approved by the Industrial Commission, QEP would need approval from 60 percent of mineral owners and working interest owners to proceed with the unit.

An order dated Dec. 12 and signed by Lynn Helms, director of the Department of Mineral Resources, said the matter is continued for 90 days or until further notice by the commission. The order states additional time is needed due to the complexity of the case.

However, the Grail-Bakken Unit is listed on the Industrial Commission’s agenda as an action item.

Department of Mineral Resources spokeswoman Alison Ritter said commissioners will still have the opportunity to continue to matter if they need more time to consider it.

Dennis Johnson, a Watford City attorney who represents many mineral owners who also are landowners in the unit, said he was not aware the proposal was on Wednesday’s agenda and he was under the impression it had been continued.

Johnson said QEP representatives met with some of the parties involved and made some revisions to the proposal.

“They liked the revisions that were suggested and made, but that does not mean that all of my clients are in agreement to the unit being formed,” Johnson said.

The meeting starts at 11:30 a.m. in the Brynhild Haugland Room of the state Capitol, where commissioners will first discuss Attorney General Wayne Stenehjem’s “extraordinary places” proposal and hear a report from the North Dakota Petroleum Council on flaring.

The discussion of the Grail-Bakken Unit will occur later in the meeting after it moves to the governor’s conference room, estimated to be after 1 p.m. The meeting is open to the public, but the record to receive public comment has closed.