Idaho Asks Texas Oil Company To Explain 'Discrepancies'

Jun 14, 2018

Idaho officials want a Texas oil company to explain what a state agency calls "discrepancies" involving oil and gas production records for wells in Idaho following an evaluation of records dating back to 2014.

The Idaho Oil and Gas Conservation Commission on Wednesday directed the Idaho Department of Lands to ask Houston-based Alta Mesa to account for apparent discrepancies between what was produced and what was sold at specific wells.

The records examined by the Idaho Department of Lands involve nine wells operated by Alta Mesa.

"There's a big discrepancy between production volumes and what was reported sold," Mick Thomas, administrator for the Idaho Department of Lands' oil and gas division, told the commissioners.

State officials say they also want to know about 28,000 barrels of liquids potentially worth millions of dollars that Alta Mesa said involved testing early in the production process that weren't reported. At the time, Idaho didn't require reporting for testing.

"I would like an explanation of those first couple years," said Commission Chairman Kevin Dickey.

Alta Mesa didn't immediately respond to phone messages from The Associated Press.

The evaluation of the records follow efforts by lawmakers in 2017 to improve oversight of the industry as expected windfalls of oil and gas money to state coffers and landowners have failed to happen despite several years of production.

Severance taxes on reported production have never matched Idaho's cost to regulate the industry.

The new laws in 2017 revamped the commission overseeing Idaho's natural gas and oil industry and beefed up the Idaho Department of Lands. Lawmakers also required more detailed reporting requirements for oil companies.

Under those new laws, the commission in February requested that Alta Mesa provide production volumes on all oil and gas wells in the state.

State officials on May 9 examined those production records and produced spreadsheets state officials say contain discrepancies. The spreadsheets were given to the five-member commission.

It's not clear when Alta Mesa might respond to the commission's request for an explanation.

On a related front, the Idaho Land Board, which includes Gov. C.L. "Butch" Otter, last year directed the Idaho Department of Lands to conduct an audit on three Alta Mesa wells the state has a financial interest in, and that could provide insights into royalty payments and severance taxes. That audit is still being conducted.

In other action, a watchdog group and southwest Idaho landowners last year filed a federal lawsuit against Idaho officials contending a state-approved process forcing them to sell their natural gas and oil violates the U.S. Constitution. That case remains active.

Idaho has a long history of oil and gas exploration starting in the early 1900s, but it was Alta Mesa using new technologies that made Idaho an oil and gas producing state.

The company has spent more than $160 million finding reserves to tap and building infrastructure but has also at times expressed frustration as Idaho officials have tried to find the best regulatory plan.