Oil & Gas, Cost of Capital, and Operator-Owned Facilities

March 11, 2020

The North Dakota Industrial Commission has ruled the actual cost for operator-owned saltwater disposal wells includes the prime lending rate plus a multiplier as our firm had recommended in its testimony to the Commission. The operator provided testimony the actual cost should include an expected equity return. We appreciate the support of Mach Energy, M3 and their counsel Pearce Durick in performing our work. Rather than 15%, the Commission adopted 8.7% as the reasonable cost of capital used to calculate rates for operator-owned saltwater disposal wells. The commission referenced the COPAS guidance we offered in our testimony.

View a PDF of the ruling here, or read below.

$\"\"$