Several efforts are underway to explore reimbursement costs to the North Dakota oil and gas industry after it was estimated that it would cost between $100 million and $250 million to bring 5,000 shut in wells back on line.
The ND Industrial Commission is looking at hosting a late May public hearing to seek input from oil and gas industry companies on the impact of market conditions and possible financial solutions.
Lynn Helms, director of the ND Dept. of Mineral Resources, told the commission in April, between 290,000 and 300,000 barrels a day are not being produced because of the wells operators temporarily plugged.
Helms said multi-state efforts are underway through the International Oil and Gas Conservation Commission to use federal stimulus funds.
“That would provide the service industry with some critical work and it might make sense to everyone in Congress,” said Ron Ness, president of the ND Petroleum Council.
“We are working the Bank of North Dakota and we have suggested that a Bakken Restart Program include zero interest loans or leveraging state stimulus funds to stimulate bringing these shut-in wells back on line when economics recover,” Ness said. “That is a win-win for everyone.”
With costs ranging from $45,000 to $50,000 per well, “it would be a monumental effort” to bring the wells back on line, Helms said.