Oct. 13--With the state seeing increased oil well applications, a south Dickinson horizon recently painted with a beaming oil derrick may again have a similar appearance.

Armstrong Operating Inc. has filed an application to the North Dakota Industrial Commission's Oil and Gas Division to create a 320-acre drilling unit to drill a vertical well.

The NDIC will hold a public hearing at 9 a.m. on Thursday, Oct. 29 to discuss the applications.

Armstrong Operating Inc. recently drilled a successful vertical oil well in the Lodgepole Formation near the Heart River Golf Course.

Mike Armstrong, owner of Armstrong Operating Inc., said the new well will be within close proximity of the previous, the Laurine Engel No. 1, but the bottom hole location will be different.

At the time of the discovery of Laurine Engel No. 1, Harold Hamm, chairman and chief executive officer of Continental Resources, a working interest owner, cited the well as the "first significant Lodgepole discovery in the Dickinson area since the late 1990s."

Armstrong began drilling in the Lodgepole Formation area in 1994 and anticipates the formation to be productive for quite some time.

"Every formation is different in depths ... targets ... what type to drill, how to drill it and when," Armstrong said. "It's a very inexact science. Obviously, we had four dry holes in that section before I found Engel."

Annette Fetzer, NDIC oil and gas production analyst, said while the Laurine Engel No. 1 is on a confidential status for six months, it has not yet sold any oil.

"You apply for it (confidential status) and the state can't give out any information for six months," Armstrong said, who added most in the oil business put their wells on confidential status.

"That's the nature of the oil business since the 1890s," Armstrong said. "You have to make sure you have all your ducks in a row before you drill."

Since December, the Lodgepole Formation has had 46 wells, according to the NDIC Oil and Gas Division's Web site.

Application numbers for oil well permits have increased, averaging three a day in September, Lynn Helms, director of the NDIC Oil and Gas Division, said in an e-mail Tuesday evening.

North Dakota has 54 active oil wells.

Sen. Rich Wardner, R-Dickinson, attributes North Dakota's strong economy to the state's oil production.

"One of the reasons the state of North Dakota is not looking at a deficit as far as state funding, a lot of it has to do with oil," Wardner said. "To the people of North Dakota it means one word -- jobs."

Area oil production supports the state's general fund and can provide property tax relief on a local level, Wardner said.

"When the state has more money, they are able to provide that local property tax relief by giving more money to the schools," Wardner said.

Wardner said new legislation passed in the last legislative session will have school districts reducing their mill levies by 75 mills as the state will be providing more money to schools.

Residents will not see the property tax relief until they work on their 2010 property taxes, Wardner said.

"Instead of coming from the locals, it'll come from the state and it's because of oil money that we're able to do that," Wardner said.

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