Chickasha council approves surface-use, water agreement with Continental Resources, adds separate frac-water negotiation

The Chickasha City Council voted to approve a surface-use and freshwater agreement with Continental Resources Inc., while asking staff to separately negotiate any frac-water use and clarifying the baseline $70,000 compensation figure.

Council discussion focused on how the company’s proposed payments were structured. A city negotiator said the city and Continental “negotiated quite a few terms” and that the company had agreed to “just about all of our recommended changes.” Councilors pressed staff about a line-item showing $60,000 for a drill site and $10,000 for fresh-water use, which together appear as $70,000 in the draft agreement.

Council members raised concerns that other elements — such as pricing for electrical lines, pipeline lengths and potential frac-water use — were not fixed in the document. One council member asked whether the $70,000 figure might be a minimum or could be exceeded by later-determined costs. City staff clarified that the $125-per-day drill-water rate listed in the document allows for additional, agreed-upon usage costs to be negotiated once a meter is installed and actual quantities are measured.

Because the surface-use agreement does not include frac water, staff recommended and the council agreed to amend the motion to approve the surface-use and water agreement while also directing staff to negotiate a separate contract for potential frac-water use and fees. The council’s amended motion specified approval of the agreement with the $70,000 baseline and the requirement for additional negotiation on frac-water terms.

The motion passed on a recorded roll call vote.

What happens next: staff will finalize the surface-use and fresh-water agreement with Continental Resources and return to council with any separate frac-water agreement or pricing proposals for the council’s consideration.