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Kern files suit over oil wells
| Monday, Jun 26 2006 10:05 PM
Last Updated: Monday, Jun 26 2006 10:09 PM
e-mail: rschuster@bakersfield.com
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The Kern County District Attorney's office has filed a $1 million lawsuit against a Houston-based energy company and its locally prominent subsidiary, alleging that their employees performed -- and then attempted to conceal -- substandard work in the plugging of local oil wells.
In what Deputy District Attorney John Mitchell termed "egregious" instances, the Bakersfield-based subsidiary, Torch Rig Services, unlawfully used dirt and other materials in place of concrete and drilling mud, failed to weld metal well caps in place, then submitted false reports to cover up its inadequate work, according to the suit filed last week.
Oil wells that are no longer financially viable, particularly older wells, are plugged, or "abandoned," to protect the environment and the public.
The lawsuit results from an investigation by the federal Bureau of Land Management, which used information provided by a Torch employee acting as a confidential informant.
"We've got a strong case, a solid case," Mitchell said.
The allegations stem from a 100-well abandonment contract between Berry Petroleum, a large Bakersfield-based independent oil and gas company, and Bakersfield-based Torch Rig Services, one of the largest independent well service companies in the state.
The suit alleges that, in January 2005, Torch Rig Services employees sneaked onto land leased near Taft by Berry Petroleum in an attempt to conceal evidence of their improper work. The services company had been instructed by a BLM inspector to stay away from a suspect well pending full inspection.
The Torch employees allegedly used trucks with duct tape placed over their headlights to conceal their presence. As they were attempting to cover over the substandard work in order to avoid further inspection, the suit alleges, law enforcement officers arrived and the Torch employees fled, leaving behind oil field equipment.
The president of Torch Energy Advisors Inc. in Houston, J.P. Bryan, has acknowledged that the individuals who trespassed that night were employees or agents of Torch, the suit states.
Officials from Torch Energy Advisors Inc. of Houston, which operated Torch Rig Services, were unavailable for comment on Monday. Jean Pledger, an attorney for the defendants, said Monday she had not received a copy of the county's lawsuit and therefore had no comment.
Bob Grayson Jr., who was named in the lawsuit as then-operations manager for Torch Rig Services, said, "as a manager I try to conduct my business in an ethical way," adding that Torch's management always tried to conduct business in an ethical manner.
The suit claims that Torch Rig Services was having financial troubles and took shortcuts to save on labor and materials costs.
Grayson disputed those claims, saying "that wasn't the case. It was and is a stable company."
Torch Rig Services was recently sold and renamed Excalibur Well Services Corp. Grayson said staffing will remain about the same at Excalibur, which is owned by Francesco Galesi, who also owns E&B Natural Resources.
Mitchell said that, despite the ownership change, Torch Energy Advisors Inc. would remain at least partly liable for any damages resulting from the lawsuit.
Berry's chief financial officer, Ralph Goehring, said he could not comment on any ongoing legal matters. However, he stated that work on all 100 wells has been completed to government standards by another independent contractor, which he declined to name.
Mitchell said his office is unaware of any immediate public health concerns related to the oil wells.
Separate litigation eventually came of the disagreement between Berry and Torch.
Last fall Torch sued Berry for failure to pay for well services rendered. Berry countersued, saying Torch improperly abandoned Berry's wells in Kern County and Los Angeles County. Berry asked for an unspecified amount in damages and reimbursement for expenses incurred when it had to pay to comply with investigators' findings and potential fines. The lawsuit between Berry and Torch is ongoing.