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Five Disposal Wells Converted to Research in Oklahoma Deal With SandRidge

Oklahoma regulators said a looming court battle with SandRidge Energy Inc. has been averted after the company agreed to shut in eight wastewater disposal wells and convert five wells for researchers to use to study seismic activity in the region.

The Oklahoma Corporation Commission's (OCC) Oil and Gas Conservation Division (OGCD) announced Wednesday that the Oklahoma City-based company also agreed to reduce overall disposal volumes by 40% at another 36 wells in the Cherokee and Medford areas, which were hit by earthquakes of 4.7 in magnitude on the Richter scale in November (see Shale DailyDec. 2, 2015; Nov. 20, 2015; Nov. 19, 2015).

Under the plan, SandRidge will cease operations at seven disposal wells it has been using and will shut in an eighth, Dotty SWD #1-27, that has been used in the past but wasn't active recently. Of the seven aforementioned wells, four -- Tatum Rose SWD 2710 #1-17, Diamondback SWD 2710 #2-5, Harley SWD #2-11 and Presley SWD #2-27 -- will be used as monitoring wells in a research project being conducted by the Oklahoma Geological Survey (OGS). The research wells will still be owned by the company.

Another SandRidge well -- the Clark 2, which had never performed disposal operations -- will become the fifth research well for the OGS. The other three wells to be shut in are the Bailey SWD #1-1, the Sidney SWD #1-3 and the Presley SWD #1-27.

"For the first time, researchers will have data that shows what is happening underground in real-time when it comes to disposal and seismicity," OGCD Director Tim Baker said Wednesday. "This OGS project will be in the forefront of the effort to learn not only more about what can be done about the current earthquake issue, but also what can be done to better identify and manage future risk."

The OCC had been preparing to take legal action, within its own court system, to compel SandRidge to shut down four wastewater disposal wells and curtail operations at 40 others (see Shale DailyDec. 21, 2015). The company had declined to shut down the wells, ostensibly on the grounds that it would be uneconomic for it to do so (see Shale Daily, Dec. 4, 2015).

"SandRidge was willing to try and work out an agreement," Baker said. "I think the result is superior to the plans originally issued. There is still a very significant cutback in volume, and the company has agreed to provide resources for this critically needed OGS research program."

According to the OGCD, SandRidge has agreed to a net daily reduction of 40%, or 191,327 b/d, by April 30. The company also agreed to place gauges and flow meters on any of its disposal wells that are not already equipped as such.

SandRidge was delisted by the New York Stock Exchange earlier this month (see Shale DailyJan. 7).

The OGCD began ordering operators to either shut down or curtail intake volumes at injection wells in March 2015, shortly before OGS scientists attributed the increase in seismic activity to injection wells targeting the Arbuckle Formation, which closely overlies the crystalline basement (see Shale DailyApril 22, 2015April 2, 2015). The OGS said the disposal of extremely salty water -- a byproduct of oil and gas production, not the mostly freshwater used for hydraulic fracturing -- is responsible for the quakes (see Shale DailyJan. 5).

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