AP NEWS

South Dakota sues Texas company over 40 abandoned gas wells

May 16, 2019

PIERRE, S.D. (AP) — South Dakota has turned to the courts to settle an issue with a Texas company and the 40 natural gas wells it left behind after a drilling project fell idle several years ago.

The South Dakota Department of Environment and Natural Resources sued Houston-based Spyglass Cedar Creek on Monday, the Argus Leader reported.

The lawsuit asks the court to order Spyglass and its partners to bring the Harding County wells into compliance. The state also seeks $15.5 million in penalties, the same amount regulators levied against the company in March for violations regarding the wells’ conditions.

Spyglass did not immediately respond to a message seeking comment.

It comes after the state’s multiple failed attempts to get Spyglass to resume production, plug the wells or request permission to abandon them.

State officials estimate it will cost almost $900,000 to plug the wells near Buffalo, where Spyglass drilled between 2006 and 2010. The drilling fell idle as the company faced lawsuits, a lender’s bankruptcy and declining natural gas prices.

Spyglass didn’t respond to the agency’s requests to bring the wells into compliance in 2015 and 2016. The company provided a plan to resolve the situation in 2017, but the department found that none of the work had been completed several months later.

Spyglass was unable to post a $200,000 bond earlier this year to keep its permits. The state’s Board of Minerals and Environment revoked the permits, and levied the $15.5 million in penalties on the company.

Landowners have complained about the wells leaking gas and the unused equipment and other debris left at the sites. The Department of Environment and Natural Resources also found that roads to access existing pipelines were in poor condition.

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Information from: Argus Leader, http://www.argusleader.com

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