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Belfield mineral rights owners air grievances for non-producing oil wells

Mineral rights owners for land about two miles northeast of Belfield are upset at an oil company sitting on potentially drillable oil. They demanded at a meeting held Wednesday at the North Dakota Geological Survey in Bismarck that the state Industrial Commission take action.

The commission asked for a public hearing to terminate, reduce or take action for wells in the Zenith Tyler Unit A Field drilled by Denver-based New Millennium Resources Inc.

There are wells in the field that have not produced for three years, Belfield resident Robert Procive.

"Now that a hearing has been established to determine whether this unit is going to be taken apart, now we got a plan to do something," he said during the hearing. "Why did it take three years to do that?"

New Millennium President Jeff Collins said the unit was effective.

Procive said the original lease states that the company needs to start pumping within 90 days, but as long as it is producing oil, the wells can stay on-site.

Officials were not aware of the situation when mineral rights owner Dan Feragen of Wibaux, Mont., brought it up to the state Oil and Gas Division in December.

"Some place there is a gap in things here," he said. "I'm not trying to be accusatory. I'm not pointing fingers, but I'm saying that if there is a hole in it, I believe it falls on the oil and gas commission to stop the holes."

The wells are visible from Interstate 94, so Feragen couldn't understand how workers didn't find out earlier, though he knew the commission is busy and it could slip through the cracks.

He suggested the company be given 45 to 60 days to re-initiate the wells or be asked to leave the site and return the mineral rights to the owners.

The wells would come back online, Collins said, but he didn't feel comfortable applying a time frame.

Mineral rights owners should include a clause detailing how long a well can go without producing, which is usually 120 to 180 days before the lease terminates, Dickinson attorney Michael Maus said.

"Some companies will try to stretch that out to a year," he said. "You want to carefully limit the days it is allowed to not produce."

Maus said the commission does not have any jurisdiction over leases and that the parties should have filed a termination of lease if the wells aren't producing.

Procive said it is strange the company doesn't abandon and plug the wells or continue production.

"I think there is some things being orchestrated in the background here," he speculated. "It seems like they're producing just enough out of this unit to hang up those leases."

Residents need to be careful when signing leases, Maus said.

"I have three cases right now where people have not been paid the lease bonuses," he said. "They got to be very careful about not giving a signed lease over until they've been paid."