DUSTIN BLEIZEFFER Star-Tribune energy reporter | Posted: Wednesday, April 11, 2007 12:00 am
For one last time, Lansing, Mich.-based Wolverine Operating LLC asked the state to delay taking action for its repeated offenses, promising that an acquisition of its Wyoming properties was pending.
Wolverine even offered to pay $20,000 of an outstanding $126,000 penalty imposed by the state back in December - if the state would just give the coal-bed methane producer one more month.
Instead, the Wyoming Oil and Gas Conservation Commission voted to revoke $171,500 in sureties and bonds posted by Wolverine, and ordered all of the company's state and fee wells in Wyoming - some 184 - sealed. That includes about 29 wells that were producing in December.
A company cannot operate in the state without those bonds.
Tuesday's action is expected to force Wolverine out of Wyoming, and possibly out of business, ending the company's yearslong reign as the Powder River Basin coal-bed methane industry's notorious bad player.
A Sheridan-based attorney hired to represent Wolverine in the hearing did not contest any of the evidence the state brought before the commission Tuesday. The evidence detailed years of failure to submit production reports and failure to conduct well integrity testing.
According to the commission, the state will not collect the $126,000 penalty assessed in December. However, the bonds and sureties may be used to plug wells and perform any needed reclamation of Wolverine's holding areas, all of which are located in Johnson and Sheridan counties.
Plugging the wells may not be necessary if someone else buys the facilities and brings them up to state standards.
The only information Throne offered to the commission at Tuesday's hearing was in a closed session, where he discussed proprietary financial information about Wolverine and the pending acquisition of its Wyoming holdings.
At the request of the commission's staff, the commission agreed to withdraw a complaint about monthly production reporting, noting that Wolverine had recently remedied that concern.
Oil and Gas Conservation Commission environmental program manager Janie Nelson testified that some of Wolverine's wells have been idle for five years or more.
In response to Wolverine's request to delay punitive action, staff attorney Eric Nelson said it was the same type of plea the agency has received from the company for years.
"At minimum, it is the staff's position to seal the wells (and revoke Wolverine's bonds)," Nelson told the commission. "We believe that in no way would this inhibit a sale."
Energy reporter Dustin Bleizeffer can be reached at (307) 577-6069 or dustin.bleizeffer@casperstartribune.net.