When we examine the activity of the Arkansas Oil and Gas Commission, we find that they are approving a few exploratory wells in South Arkansas, and much fewer in the gas rich northern district of the Arkoma and Fayetteville Shale.
What I do see is Merit and others attempting to delay plugging and abandoning certain low producing or shut in wells, quite a few being in the Arkoma side of the basin in Franklin, Johnson, and Logan Counties.
With some hope that perhaps higher prices are on the way, they probably want to justify re-fraccing the wells, or otherwise trying to recomplete or increase production. They ask for extensions to their permissions to delay completion or production.
It does suggest that the gas in the basin is now able to find markets and that the prices are up. That’s a good thing for the mineral owner.
Additionally the AOGC has approved more wells to exploit the brines of South Arkansas from an experimental project to produce lithium from the heavy brines of the Smackover formation. I wish I knew more about the production of lithium. Last year the LANXESS lithium pilot project in South Arkansas produced over 2 tons of lithium chloride which was re-injected into the ground, and produced 44 lb. of lithium carbonate which was apparently kept. This was from about 3.5 million gallons of brine. I haven’t had any updated information since the end of 2020.
However, the projects 18 month life was severely impacted by the Covid pandemic. As a result, the company has asked to extend the project, citing the following reasons.
- The ongoing Covid-19 pandemic has restricted the traveling of engineers and SLL staff to the pilot plant site;
- The ongoing Covid-19 pandemic has delayed delivery of materials and equipment to the site which is required to operate the Pilot Plant;
- The ongoing Covid-19 pandemic delayed the delivery and installation of a lithium carbonate crystallization plant originally scheduled for the third quarter of 2020 to the third quarter of 2021.
- During early operation of the Pilot Plant, some needed equipment modifications were identified for which new equipment had to be ordered. Those modifications to the plan were implemented during December 2020 and January 2021;
- Severe winter conditions in February, 2021, caused a complete shutdown of LANXESS’ brine field operations in Union County.
- The Applicants request that Order Reference No. 057-2018-10 be extended by order of the Commission for approximately twelve months, until the Commission’s December 6, 2022 hearing, in order to compensate for the events causing the Pilot Project’s delay.
It seems reasonable to assume the OGC will extend the pilot project in light of the future of lithium and the prospect for advancing new technology to exploit lithium which will be in huge demand in the coming years.