HYDRAULIC FRACTURING Small producer wins verdict against Devon in ‘frack hit’ case
An Oklahoma jury has awarded $220,000 to a company that says hydraulic fracturing of a horizontal oil well damaged its conventional oil well.
Advocates for vertical well owners called the verdict against Devon Energy Corp. a significant victory in the bitter fight between small producers and large independents in the state.
“This might just open the floodgates of justice for producers who have lost wells to horizontal fracking,” said Mike Cantrell, legislative director and board member of the small producers’ group, called the Oklahoma Energy Producers Alliance.
Small companies operating vertical wells have filed numerous lawsuits in Oklahoma against larger independent producers that drill long horizontal wells nearby. The small companies say their wells have been damaged by the high-pressure fracture treatments performed on the horizontal wells. The fight has also spilled into the state Legislature.
Devon, based in Oklahoma City, declined comment on the verdict, first reported by OK Energy Today.
The jury sided with H&S Equipment Inc. of Oklahoma City on private nuisance and “subsurface trespass” claims but with Devon on claims of negligence. H&S had said it suffered $2.5 million in damage for the profits it would have made from the damaged well and the costs of plugging the well and drilling a new one.
H&S had a conventional vertical well in Blaine County, Okla., that had been producing oil since 1981. In August 2015, Felix Energy of Denver fracked a well nearby. Devon bought Felix assets in the area in a deal announced in 2015.
In fracturing, water, sand and chemicals are pumped at high pressure into a well to crack open rock and release oil and gas. H&S alleges the frack fluid shot past the area where Felix was to produce and toward the H&S production area.
The day after, the frack fluid started erupting from the well into the air, H&S alleged, as a result of what’s called a “frack hit.”
The frack hit caused serious damage, H&S claimed in the suit, “ruining the well and rendering it incapable of producing oil and gas.” H&S alleged that Felix had fracked “recklessly.”
Devon attorneys argued that Felix had “fully complied” with the rules of the state oil and gas regulators at the Oklahoma Corporation Commission.
They also argued that Felix had not been reckless.
“If a ‘frack hit’ occurred, it was at most inadvertent, and Felix’s engineers did not consciously disregard the risk,” Devon attorneys wrote in a motion, saying fracking fissures are hard to control.
They cited a previous ruling that the cracks created by fracking are “of immeasurable length and uncontrollable direction.”
Another Battle is Indeed Looming