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South Dakota seizes $130K from failed oil driller

Posted March 17

— A state board has taken final action to seize $130,000 from a failed oil-drilling company, while acknowledging that an open well left near Wasta could pollute underground water.

The Rapid City Journal (http://bit.ly/2maKghq ) reports the Board of Minerals and Environment approved Thursday the findings of fact, conclusions of law and order in the case of Quartz Operations LLC. The order by the board took away the company's oil and gas permit and required it to forfeit the $130,000 worth of bonds. The money will be contributed to any future expenses at the company's failed drilling site.

Quartz obtained permits in 2013 to drill two wells in eastern Pennington County, despite the state Department of Environment and Natural Resources' concerns.

"The Department felt that the location, depth and target formation of the proposed wells, coupled with Quartz's lack of experience in the oil and gas field, suggested a higher than typical bond amount should be set," the findings said.

The first well, which now has a potentially dangerous borehole, failed because the company lost drilling fluid circulation after hitting sediment about 4,800 feet below. The second well was never drilled.

The money is not enough to match the $2 million required to plug the aquifers pierced by the company's borehole.

The unplugged portion of the well's borehole could create a pathway for upward flow of Minnelusa Aquifer water into the Inyan Kara Aquifer. Minnelusa is believed to have more dissolved solids than Inyan Kara, so the borehole could degrade the latter's water quality.

Department officials said they will continue to monitor water wells in the area.

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