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State reduces company’s fine for failing to plug 2 wells

July 3, 2018

KENAI, Alaska (AP) — The state has reduced the fines for an oil and gas company that failed to plug two Cook Inlet wells before the end of its leases.

The Alaska Oil and Gas Conservation Commission, the state entity responsible for ensuring that the subterranean portions of oil and gas developments are cleaned up after use, announced Friday that NordAq Energy will pay $25,000 for each well, the Peninsula Clarion reported .

The fine is significantly less than the $771,000 fine for both wells that the state had originally proposed in December 2016 for failing to plug and abandon its Shadura 1 exploratory gas well north of Nikiski and its exploratory Tiger Eye 1 well on the west side of Cook Inlet.

The commission decided to lower the fine after it found mitigating circumstance after a series of hearings, reviews and reconsiderations held in April, June and September 2017.

NordAq finished plugging and abandoning the Tiger Eye well last September and the Shadura well in March.

It currently holds interest in some Beaufort Sea leases, but none in Cook Inlet.

NordAq did not plug the Tiger Eye well because it was trying to sell it to Cook Inlet Energy, another hydrocarbon extractor, which declined to the buy the well by July 2016, Robin Brena said, the lawyer representing NordAq in a hearing on the penalties.

NordAq did not immediately plug the Shadura well, because it was considering drilling a sidetrack “that didn’t prove viable.”

Brena argued during the hearing the fines should be reduced since no damage was caused.

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Information from: (Kenai, Alaska) Peninsula Clarion, http://www.peninsulaclarion.com