SandRidge Energy and the Oklahoma Corporation Commission's Oil and Gas Conservation Division reached an agreement Thursday regarding wells in the Medford, Cherokee and Byron areas.
The plan will reduce wastewater volume injections and convert some wells from disposal to research operations.
"Under the plan, SandRidge has agreed to remove seven wells from disposal operations, and cut back its total volume for the areas in question by 40 percent, or approximately 191 thousand barrels a day (by April 30)," said Tim Baker, OGCD director, in a written statement. "Of the seven wells that will stop disposal, three will cease operation entirely, while the remaining four will be used as monitoring wells in an Oklahoma Geological Survey research project. Also, a well that has been unused will be given to researchers, making for a total of five wells dedicated to research."
OCC officials requested SandRidge close four wells in the Medford area and two wells in the Byron area before Dec. 9, 2015, following a Dec. 3, 2015, bulletin sent to the company.
OCC also requested SandRidge decrease volume at more than 40 of its wells by 25 to 50 percent by Dec. 9, which was not done.
Wednesday's agreement puts a halt on a looming court battle between SandRidge and OCC.
According to Oklahoma statute, OCC has exclusive jurisdiction, power and authority to make and enforce rules and orders, governing and regulating items "within its state as are reasonable and necessary for the purpose of preventing the pollution of the surface and subsurface waters in the state." OCC's jurisdiction and authority pertains to Class II wells, injection wells.
"The companies have always been told that if they did not comply, court action would follow to get compliance," Skinner said in a written statement in December. "The Oil and Gas Division cannot mandate a change in operations without due process, which includes court if the operator decides not to comply."
Baker said OGCD was about to file a case to force compliance on SandRidge regarding the request in December.
"SandRidge was willing to try and work out an agreement," Baker said. "I think the result is superior to plans originally issued. There is still a very significant cutback in volume, and the company has agreed to provide resources for this critically needed OGS research program."
Baker said the four monitoring wells to be used by OGS will provide real-time data in regards to seismicity and disposal.
"This OGS project will be in the forefront of the effort to learn not only more about what can be done about current earthquake issues, but also what can be done to better identify and manage future risk," he said.
David Kimmel, SandRidge director of communications, said the company worked closely with OCC to address the "complex issues with science as our guide."
"The directive achieves both significantly reduced disposal volumes in the area of interest and a further commitment to scientific research through significant new data collection in collaboration with the OGS," Kimmel said in a written statement.
Oklahoma Oil and Gas Association President Chad Warmington said in a written statement the processes at OCC worked as intended.
"SandRidge was able to work with the OCC using an extensive review of data and science in order to achieve a very positive outcome," he said. "SandRidge has additionally agreed to develop and pay for a significant new data collection program that will be used by the Oklahoma Geological Survey, Oklahoma Corporation Commission and other researchers to make smarter, more informed and impactful regulatory decisions."
Warmington said the decisions demonstrates the industry's attitude in taking its responsibilities seriously.
Last week, 226 Lariat Services employees were laid off in Cherokee and Alva. Lariat is a subsidiary of SandRidge.
Lariat provides solutions for exploration and production companies located in Oklahoma and Kansas.
Earlier this month, SandRidge stock was delisted from the New York Stock Exchange when the price hit an all-time low of 15 cents per share.
The company owns more than 1.85 million acres in the Mississippian oil play, which is located in northwest Oklahoma and southern Kansas.