Miss Lime at risk for earthquake regulatory response

 

 

After two 4.7-magnitude earthquakes struck in as many weeks, the Oklahoma Corporation Commission is likely to hand down additional regulations to area operators. We use our North America Well Analysis Tool to explore the areas surrounding the quakes to assess who may be affected. 

Operators in the Mississippi Lime could be at risk for a regulatory response after a series of earthquakes erupted throughout the play over the past two weeks. A 4.7 magnitude earthquake struck in Grant County, Oklahoma, on Monday, just days after a similar quake — also of 4.7 magnitude — shook Alfalfa County to the west.  

After two earthquakes occurred in as many weeks, we examined the area using our North America Well Analysis Tool to see which operators may be impacted by potential regulations handed down by the Oklahoma Corporation Commission (OCC). Looking at a 10-mile zone around the epicentre of this week's quake, we determined that SandRidge, Chaparral and Atlas Resource Partners are most exposed to the potential protocols.  

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The last OCC response to earthquake activity included a directive that all disposal wells within three miles of the epicentre would be shut down, and those operating within 10 miles were required to reduce activity. 

We expect a similar response in light of the most recent quake, but because its epicentre lies outside the core of the Mississippi Lime, we expect fewer wells to be impacted. With rig count already declining across the Lower 48 — a trend we expect to continue through June of 2016 — any additional rigs taken offline due to earthquake activity could further impact  near-term production totals.

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