Serving The Bakken And Beyond

Commission Asked To Order Irish Oil To Pay For Well Costs

Contending that Irish Oil & Gas, Inc. of Bismarck, ND refused to pay its share of the drilling costs in more than a dozen North Dakota wells, Crescent Point Energy wants the ND Industrial Commission to arbitrate the dispute.

Airing of the dispute has been postponed to December in Bismarck.

Crescent Point attorney Brent Chicken of Denver will ask the commission to enforce elections to participate in the drilling of the wells in Williams, Bottineau and Divide counties that were drilled in 2012.

Usually, the terms of voluntary pooling are met when non-participating owners agree to pay their share of the costs, he said, in documents filed with the commission.

The practical effect of the original commission orders is “to reward Irish for electing to participate but refusing and/or failing to pay its share of costs...” on the wells which have “underperformed”.

That forces Crescent Point to bear Irish’s share of the risk, Chicken said. Even though Crescent Point has paid Irish for a portion of its production revenues and royalties from the wells, it has not applied the risk penalty under state law.

The original commission orders imply that Irish participation are “not binding enforceable contracts” between Crescent and Irish, Chicken said. The effects of its original orders on the Crescent wells are to reward Irish for electing to participate but refusing to pay its share of the costs.