Oil company to plead guilty to criminal charges over spill

By Matt Volz, Associated Press

An oil company has agreed to plead guilty to two criminal charges and pay a $100,000 fine for a 2011 spill in northwestern Montana, but its attorneys urged a judge to approve the deal quickly while it can still afford to pay.

 

HELENA, Mont. (AP) — An oil company has agreed to plead guilty to two criminal charges and pay a $100,000 fine for a 2011 spill in northwestern Montana, but its attorneys urged a judge to approve the deal quickly while it can still afford to pay.

FX Drilling Inc. will admit to negligently discharging oil into waters of the United States and to failing to immediately notify federal officials, under a plea agreement filed Tuesday in U.S. District Court. The deal calls for the company to pay the fine on top of the $321,000 it already spent to clean up the spill, and for federal prosecutors to dismiss charges against the company's supervisor.

Up to 840 gallons of oil and production fluid leaked from a cracked line at an oil field on Blackfeet Indian Reservation. The spill spread over land nearly a mile to Cut Bank Creek, where it was spotted by a rancher and reported to the Blackfeet Environmental Office, according to prosecutors.

Blackfeet officials informed FX Drilling of the spill, but the company never reported it to the federal National Response Center, prosecutors said.

The company and federal prosecutors have agreed that the cracked pipe was an accident and that FX Drilling has satisfied its restitution obligations by paying for the cleanup, according to court filings.

Both sides urged U.S. District Judge Brian Morris to approve the plea deal and fine quickly, because the company is having financial difficulties, according to a joint request by prosecutors and attorneys for FX Drilling.

"The parties are concerned that a protracted sentencing process, especially if coupled with additional downturns in oil prices or other unforeseen economic events, could increase the risk of FX Drilling not being able to pay the agreed-upon $100,000 fine," the request said.

FX Drilling attorney Jeffrey Corey declined to comment Thursday.

Morris set a court hearing for Aug. 11.

FX Drilling is a subsidiary of Salt Lake City-based FX Energy Inc. Its field supervisor, Quay Geza Torok, faces the same charges as the company, but prosecutors will drop those charges as part of the plea agreement.

Torok discovered the 3-inch line connecting two oil wells had cracked. The line was fixed, but Torok and the company did not take steps to clean up the oil that had already leaked, according to the indictment.

Torok attorney John Smith said his client is not entering into a separate agreement with prosecutors.

"Quay is standing on his innocence," Smith said.

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