A divided Corporation Commission keeps order allowing voluntary well closures to prevent crude oil waste

A majority of elected members of the Oklahoma Corporation Commission decided Wednesday to continue allowing operators to voluntarily shut-in wells in cases where those operators believe crude oil is being wasted.

Chairman Todd Hiett and Commissioner Dana Murphy voted to approve an interim order that extends findings of fact and conclusions of law included in an earlier emergency order adopted in April that gave producers that ability.

The interim order aims to provide relief to operators who otherwise would be forced to lose money on what they produce, while specifically protecting correlative rights held by the company, well investors and mineral rights owners.

Some operators have stated they believe the commission’s order provides them with an ability to shut in unprofitable wells without losing leases that are held by production.

Notably, the interim order approved Wednesday adds language that strengthens that position through stating that wells shut in under the order “shall be deemed as producing under the commission rules and regulations.”

Commissioner Bob Anthony voted no on Wednesday’s order.

In a prior written dissent, Anthony wrote he believed the measure was “replete with fatal errors.”

Anthony wrote the order lacks any specifics about at what price for oil waste occurs. Plus, he said it gives operators the discretion of making that determination, rather than regulators.