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No Evidence of Oil, But Wasta Precambrian Dig Draws Big Bucks, State Permits

In perhaps the most curious energy-exploration news of the week, Deadwood oil driller Natali Ormiston plans to start drilling for oil near Wasta next week. Ormiston and her company, Quartz Operations (also organized just last November), plans to drill 9,700 feet into hard Precambrian rock over a billion years old. In other words, she's not drilling for dinosaur or trilobite oil; she's drilling for oil made from bacteria, algae, and sponges.

The state Board of Minerals and Environment is skeptical:

9. The Precambrian formation is a geologic formation from which neither oil nor gas has been discovered in economic quantities in South Dakota or neighboring states, and is not a formation traditionally associated with the discovery of oil and gas.

10. Quartz Operations has not submitted any documentation or information substantiating that oil or gas is likely to exist in economic quantities in the Precambrian formation in the locations of the proposed wells.

11. The cost of drilling an oil well to a depth of approximately 9700 feet in other more easily drilled target formations is approximately $3 million per well.

12. Quartz Operations has no experience drilling oil and gas wells, or producing oil or gas. During the application process, Quartz Operations submitted invalid mineral leases and substantially incomplete applications. Quartz Operations refused to disclose their basis for belief that oil and/or gas exists at the Precambrian formation that is the target formation for the two complete applications for drilling permits. Quartz Operations has not disclosed the identity of an oil well drilling contractor hired to drill these wells [Rozanne Gield, Deputy Attorney General, "In the Matter of the Applications of Quartz Operations...," South Dakota Board of Minerals and Environment packet, 2013.03.11].

But on Thursday, the BME said to Ormiston, "Go ahead, knock yourself out." The board required that Quartz Operations plunk down two more bonds, $110,000 for one well and $130,000 for the other, on top of the $20,000 bond Ormiston has already deposited with the state. Ormiston wrote those checks on Thursday and got her permits.

Did somebody hit it big at the Silverado and go crazy? That's $260,000 in bonds, plus at least $6 million for two wells for which there is no public evidence of payoff. Among the few logical explanations here are that Ormiston has one heck of a divining rod (in this case, a doodlebug!), or somebody in the Mafia is bankrolling some really deep hidey-holes near Wasta.

11 Comments

  1. Rorschach 2013.03.24

    Could this be a cover for uranium mining or some other such thing?

  2. Stan Gibilisco 2013.03.24

    Let's suppose for a moment ... I know there's "no evidence," but let's just imagine ... these guys drill down and, at 9,699 feet, hit a huge oil deposit. West River Sweet Crude!

    Then what?

    Oh but of course that's impossible. There's "no evidence." Let's just send those folks packing and we'll never have to even think about what might happen in such a scenario.

  3. caheidelberger Post author | 2013.03.24

    The biggest evidence available is that someone is willing to write a $240,000 check on the spot and then start a project in a few days that is supposed to cost $6 million. And that's nothing to sneeze at. Someone believes something is worth digging for in the greater Wasta metro area. I'd love to know what's motivating that belief.

  4. caheidelberger Post author | 2013.03.24

    R, this Wasta history doesn't mention local mining of any sort. I don't think anyone digs that deep for uranium.

    But it's a permit to drill for oil and gas exploration. Is there any reason someone looking for uranium or some other treasure would apply for an oil and gas permit? Would a uranium permit be harder to get?

  5. Bill Dithmer 2013.03.25

    "Is there any reason someone looking for uranium or some other treasure would apply for an oil and gas permit? Would a uranium permit be harder to get?"

    Yes Gory there is. Oil and gas don't have the reputation and bad connotation that uranium has. "Oh boy we might have oil or gas here." Or, dirty damn uranium hunter." You can have your pick but core samples will tell the story.

    I do know one thing they will hit down there. Hot water and lots of it. I WANT THAT HOLE IN THE GROUND if they do.

    The Blindman

  6. Stan Gibilisco 2013.03.25

    So start a community powered and heated entirely by that hot water and the heat in the earth that goes with it.

    Call it Geothermopolis, complete with a naturally heated 50-meter swimming pool and fitness center.

    In my dreams.

  7. caheidelberger Post author | 2013.03.25

    Bill, is there any profit to be turned by tapping that hot water? As Stan suggests, we could do some awesome geothermal heating for Wasta, but is there any transferrable power or wealth in a hot spring?

  8. caheidelberger Post author | 2013.03.26

    If geothermal power is profitable, why disguise it in a oil/gar exploration permit?

  9. Bill Dithmer 2013.03.26

    Yes Cory there does seem to be a Christmas elf. If you look at a few articles on this subject it becomes clear that there is oil in the Precambrian formation. First I found this on "Science Frontiers"

    "Yet, Precambrian oil in commercial quantities has been found in formations up to 2 billion years old (in Siberia, Australia, Michigan, for example). While some of this oil might have migrated in-to the Precambrian rocks from younger source rocks, some of it does seem indigenous and, therefore, ancient."
    http://www.science-frontiers.com/sf119/sf119p08.htm

    And then from Earth Pages "Did oil and gas fields form during the Precambrian?"
    http://earth-pages.co.uk/2005/08/01/did-oil-and-gas-fields-form-during-the-precambrian/

    "Controls on Precambrian uranium ore formation: The role of ancient oil (and evaporates?"

    And this statement from the same article. "High-grade complex U deposits were formed at the final stage of the oil and gas reservoirs degradation." Is this what they are looking for?
    http://link.springer.com/chapter/10.1007%2F3-540-27946-6_78

    The government has been selling geothermal leases for a couple of years now in a big part of the US. IF you have deep enough pockets, and are willing to take the leap, you can stop anyone else from developing the same type of commercial development by claiming your lease protections.

    Its harder for me to do research then it used to be folks. I'm sure someone out there can find the parts to this puzzle if they drill deep enough.

    The Blindman

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