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Cooperation may be essential for oil development

Oklahoma's small to mid-sized oil and natural gas producers are known for being fiercely independent, but cooperation may be necessary to develop new oil fields.
by Adam Wilmoth Modified: November 30, 2012 at 9:12 am •  Published: November 30, 2012

The call for increased openness came just one week after I talked with oilman Steve Slawson and Oklahoma Corporation Commissioner Dana Murphy about the lack of electricity and other infrastructure in the rural Mississippi Lime field.

A problem in the area is that electric cooperatives and pipeline companies are reluctant to spend millions of dollars on infrastructure when they don't know how many wells are planned or where they will be located.

“These operators need to talk to their neighbors and say, ‘I'm drilling 10 acres here and you're drilling six acres there, so let's go in together,” said Slawson, vice president of Slawson Exploration. “But the operators still aren't talking to each other. The operators need to communicate with each other and with the co-ops.”

To address the power shortage, many cooperatives are asking producers to build their own distribution lines and substations, which would add many millions of dollars to the companies' drilling costs.

Again, cooperation appears to be best answer.

“What we're going to have to see is more dialogue and collaboration among these various producers, both big and small,” Murphy said. “It could be that a bigger company could build part of the distribution and substation and allow space for more to be added by the smaller producers. I think you're going to have to see a collaborative effort.”

by Adam Wilmoth
Energy Editor
Adam Wilmoth returned to The Oklahoman as energy editor in 2012 after working for four years in public relations. He previously spent seven years as a business reporter at The Oklahoman, including five years covering the state's energy sector....
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