That's not all CountryMark is willing to do

The sweet spot

CountryMark has believed for years that the area near the proposed Midway Acres drilling unit contains substantial amounts of crude oil. The company proposes to drill to a depth of 2,300 feet into the cypress sandstone rock formation.

McDivitt's order of integration says Core Minerals "successfully drilled three horizontal wells just west of the proposed unit (which are now operated by CountryMark) and CountryMark believes this project will have similar results."

In an April 24, 2008, letter to the other dissenting property owner, who is adjacent to Williams, Core Minerals acknowledged it said in August 2007 that "the producing (rock) formation we are targeting has produced thousands of barrels of oil from your neighborhood in the past."

"Because of the particular geology involved with this formation and past production we have determined that only a small percentage of the recoverable oil was extracted."

The problem for CountryMark is that Williams' property, which he and his wife bought in 2006, lies over or near what the company believes is the largest oil supply in the 80-acre drilling unit.

"This isn't a situation where you could go anywhere in that neighborhood, anywhere in that township, and drill a well down to this depth and you're going to hit oil in the cypress," McDivitt said.

"That's not the way the oil exists. It's very much confined to discrete areas, and (CountryMark has) mapped it and identified his property as pretty close to or right over the sweet spot."

Frank Lindsey, manager of regulatory compliance/land for CountryMark, confirmed McDivitt's assessment.

"We would not be willing to spend the money to drill oil there if that were not true," Lindsey said.

That's not all CountryMark is willing to do.

In a move McDivitt said is news to him, Lindsey says the company decided late last year it was willing to alter the path of its horizontal well bit to go around, not under, Williams' property.

But not so far around that it cannot drain enough oil into the well to justify the potential $750,000 expense.

"We'd go very close to it. If we stay close to his property, we can recover close to the same amount of oil," Lindsey said. "We agreed to do that to try to accommodate Mr. Williams as best we could."

But if CountryMark thought Williams would regard the shift as an important concession to him, the company was wrong.

Williams said CountryMark representatives floated the idea a few months ago, but did not pursue it actively.

"If this was truly a concession, they have had plenty of time in order to state that they were going to go with this route," Williams said. "I think they're telling you about it to not look so bad in the eyes of the press."

Possible compromise

McDivitt said CountryMark's willingness to go closely around, but not underneath, Williams' property may be an effort "to avoid the liability."

Lindsey insisted it was a desire to satisfy Williams so the work could begin, and not a fear of litigation, that motivated CountryMark.

"We've done a number of things to be less intrusive on the people who live (at Midway Acres)," he said. "The other people that would love for us to drill this well so they could share in the revenue will not have that opportunity if we can't get an order of integration here."

The plan to go around Williams' property still requires a signed lease or written waiver from him. But a favorable ruling in the forced pooling case, which would not have to begin all over again, would trump Williams' refusal to give permission.

Williams says he likely won't give that permission because going closely around his property doesn't alleviate his concerns about his well water or the potential damage from hydraulic fracturing, a controversial drilling technique.

Admitting he lacks the knowledge of a geologist, Williams insists CountryMark officials casually mentioned the possibility of hydraulic fracturing before reversing themselves. Lindsey says the idea has never been considered.

The drilling technique, commonly referred to as "fracking," involves high-pressure pumping of water and chemical additives into rock formations, followed by propping agents to prevent the resulting fractures from closing.

The practice has spawned complaints of contaminated air and well water in Pennsylvania and other states. However, many state regulatory agencies believe hydraulic fracturing does not contaminate ground water with chemicals.

McDivitt says his department has no documented instance of hydraulic fracturing causing contamination of groundwater in Indiana.

CountryMark does not take hydraulic fracturing lightly, Lindsey said.

Pointing to the relatively porous cypress sandstone rock formation under Williams' property, he said fracking is simply not necessary there.

"We wouldn't do that unless we thought we just had to," he said.