PIERRE, S.D. (KELO) — An Iowa man who’s no longer living on his own has agreed to let permits be revoked for six wells in the Barker Dome oil field in southwestern South Dakota. But the $100,000 plugging and performance bond that South Dakota law required him to post won’t be sufficient to reclaim the sites, according to a state official.
On Thursday the South Dakota Minerals and Environment Board unanimously accepted an agreement reached between Thomas L. Sunde (pronounced sun-DEE) and the state Department of Agriculture and Natural Resources regarding the wells and forfeiture of the bond. Sunde said that the wells had last performed in 2022 and acknowledged that he was in violation of a state rule regarding abandonment of wells.
The board voted to revoke the permits and collect the bond. Board member Laurie Schultz of Pierre asked what happens next. Deputy attorney general Steve Blair said the department would take responsibility for having the well sites in Custer County plugged and reclaimed.
That led to another question. “Will one hundred thousand dollars cover the bill?” asked the board’s chair, Glenn Blumhardt of Bowdle. Mike Lees, administrator for the state’s minerals and mining office, answered, “One hundred thousand dollars is not enough to plug the six wells.”
Lees said DANR planned to take whatever additional amount was necessary from the $130,000 of bond that the board had collected in 2016 on the failed Quartz Operations oil-well permit near Wasta, South Dakota.
While Lees had an estimated amount it would cost for plugging the Custer County wells, however, he didn’t tell the board.
KELOLAND News asked Lees afterward for the estimated amount. Lees said he needed to clear the answer with another person in the department and would send an email. A short time later came his reply.
“You asked what the department’s cost estimate is for plugging Thomas Sunde’s six oil & gas wells,” Lees’ answer began. “The department developed a preliminary cost estimate that exceeds the $100,000 surety posted by Mr. Sunde.
“We think, between the surety forfeited today and other oil & gas surety forfeited by another operator a few years ago, that we have most or all of what we need to fund plugging Mr. Sunde’s wells,” Lees continued. “However, we don’t want to publish the department’s plugging cost estimate because we have not yet opened up the plugging job for bids, and we don’t want our estimate to influence future bids.”
In the agreement that Sunde signed is a paragraph about his present situation: “Thomas L. Sunde currently resides in assisted living and has minimal financial resources. Mr. Sunde has no intention to put the wells identified above into productive use and has no financial means with which to do so. Similarly, Mr. Sunde has no financial means with which to appropriately plug and abandon the identified wells.”
Neither Sunde’s attorney, David Forsyth of Estherville, Iowa, nor the firm that issued the bond, Lexon Insurance Company, took part in the enforcement hearing on Thursday.
However, during the board’s public comment period immediately after the hearing, Byron Eberle of Edgemont, South Dakota, spoke. Eberle said he had pumped Sunde’s wells in the Barker Dome field for many years.
“We’d just like to make it a matter of record that Sundes owe me quite a bit of money for maintenance, material, things of that nature,” Eberle told the board. “I had worked unsuccessfully for the last two years to get some payment from Mister Sunde’s business manager.”
Eberle continued,” My only hope is that I can recover something from the field. I’m reluctant to file a lawsuit because a lawsuit costs money and the salvage is not that great. I do have money in the field and would appreciate whatever could be done or if nothing else to make it a matter of record.”
