Posted: Jan 15, 2013 8:41 AM by Jay Kohn
SIDNEY - By mid-summer, the town of Sidney could see part of the action in a community-owned oil well.
According to the Sidney Herald Newspaper, the Montana Board of Oil & Gas has approved temporary spacing for a well north of Sidney.
Once that well moves into production, it could generate between $5,000 and $15,000 a year for the city, perhaps more depending on the well's success.
About 80 percent of Sidney residents would also see yearly checks between $50-$100.
The approved paper work on the oil well application contains dozens of pages with residents' names who will receive an oil check.
Those residents who will receive checks, will be those who own mineral rights to their property.
Sidney Mayor Brett Smelser plans to donate his check to the city, to help start up a fund that could be used for city infrastructure projects and employee salaries.
Smelser hopes he can also convince other residents to do the same.
"A lot of small checks make up one big check," explained Smelser.
He believes the city will need every dime it can get, if projections that Sidney's population will exceed 10,000 people within the next two to five years prove to be true.
Smelser gives credit to XTO Energy for putting up millions in upfront costs for the well.
Work on the well site is scheduled to being this May, with the well producing oil perhaps as early as mid-June.
Also on the energy scene, a new forecast from the federal government, predicts U.S. oil production will increase by as much as 14 percent this year alone.
Currently, U.S. oil production is at a 15-year high, with production expected to rise to 7.3 mill barrels per day this year.
U.S. oil production bottomed out at a low of 5 million barrels per day in 2008.