An oil company's application for 20 water well permits in far western North Dakota remains on hold, pending an appeal hearing.

A prehearing on Zenergy Inc.'s application to drill for fresh water to inject down oil wells in a field west of Alexander was held last week, and administrative law judge Allen Hoberg will hear motions in the case before setting a hearing date.

The Dakota Resource Council filed an appeal after the State Water Commission said Zenergy could drill for water, though the commission said the oil developer would have to drill deep enough to avoid drawing water from the shallow water zone used by local ranchers.

The Foreman Butte field being developed by Zenergy is in one of the saltiest oil zones in the state.

Zenergy needs to inject fresh water down its oil wells to dilute the water that naturally comes up with oil to prevent the heavy salts from crusting over its equipment.

The DRC says the water Zenergy will take out of the aquifer will diminish water levels and harm primary water rights.

DRC member Don Nelson said water rights should not automatically be part of oil drilling rights, though that is how the state has recognized them.

Zenergy did not return phone calls for comment.

It's the same company that spilled about 1 million gallons of toxic salt water in the Foreman Butte field in January 2006. The spill contaminated a creek drainage and forced ranchers to pull their cattle from the creek until the salt moved through the creek.

Zenergy has cleaned up the spill site and will monitor the creek and ground water for several years, as part of a remediation order by state agencies.