BEFORE THE OIL AND GAS CONSERVATION COMMISSION

                                                                OF THE STATE OF COLORADO

 

IN THE MATTER OF ALLEGED VIOLATIONS OF THE RULES              )                    CAUSE NO. 1V

AND REGULATIONS OF THE COLORADO OIL AND GAS                     )

CONSERVATION COMMISSION BY ENCANA OIL & GAS (USA) INC.,  )                    DOCKET NO. 0407-OV-26

WELD COUNTY, COLORADO                                                                )

                                                                                                                                                                                    

                                                NOTICE OF ADMINISTRATIVE ORDER BY CONSENT

 

TO ALL INTERESTED PARTIES AND TO WHOM IT MAY CONCERN:

 

            On August 6, 2002, Colorado Oil and Gas Conservation Commission (“COGCC”) staff received an Application for Permit to Drill (“APD”) from EnCana Energy Resources Inc., (“EnCana”) for the Bangert #31-19 Well (the “Well”), located in the NE¼ NE¼ of Section 19, Township 2 North, Range 66 West, 6th P.M.  The APD specified a surface hole location of 510’ from the North Line and 657’ from the East Line.  The APD specified a bottom hole location of 600’ from the North Line and 2000’ from the East Line.  The APD was approved on August 22, 2002.

 

            On March 1, 2004 the COGCC received required forms, logs, and a directional survey from EnCana for the Bangert #31-19 Well.  The logs and directional survey indicated that the surface hole location for the Well was 1117’ from the North Line and 1105’ from the East Line of Section 19, Township 2 North, Range 66 West, 6th P.M.  The COGCC Drilling Completion Report, Form 5, indicated that the Well was spud on April 5, 2003 and was completed on April 17, 2003.  The COGCC Certification of Clearance, Form 10, indicated that the date of first sales was June 3, 2003 for the Well.

 

            On March 19, 2004 COGCC staff sent a Notice of Alleged Violation (“NOAV”) to EnCana for violation of Rule 301., failure to obtain Commission approval for change of surface hole location, Rule 308A., failure to submit COGCC Drilling Completion Report, Form 5, and logs within thirty (30) days of setting the production casing, Rule 308B., failure to submit COGCC Completed Interval Report, Form 5A, within thirty (30) days of completing a formation, and Rule 312., failure to submit COGCC Certificate of Clearance, Form 10, within thirty (30) days after initial sale of oil or gas.  The NOAV had an abatement date of April 16, 2004. Per the return receipt, the NOAV was received by EnCana.  The return receipt did not have a date of delivery but was returned to the COGCC on March 23, 2004.

 

            As of April 22, 2004 EnCana had not complied with the NOAV, nor had EnCana contacted COGCC staff concerning the matter.  COGCC staff contacted EnCana by telephone on April 22, 2004 to discuss the NOAV.  EnCana indicated that they would resurvey the Well and respond back to the COGCC during the week of April 26, 2004.  On April 29, 2004 EnCana contacted the COGCC and stated that the Well had been drilled at the correct surface location but that the directional drilling program was designed for an alternative surface location.  The bottom hole location for the Well was actually in Section 18, Township 2 North, Range 66 West, 6th P.M.  This bottom hole location is owned by another operator. EnCana indicated that the Well was non-productive and would be plugged and abandoned. On April 29, 2004 the COGCC received revised information for the Well from EnCana. The revised location plat for the Well showed an actual surface hole location of 465’ from the North Line and 655’ from the East Line of Section 19, Township 2 North, Range 66 West, 6th P.M. which did not exactly match the original permitted surface location.  The revised directional survey showed a bottom hole location of 97’ from the South Line and 1547’ from the East Line of Section 18, Township 2 North, Range 66 West, 6th P.M. which did not match the original permitted bottom hole location.  EnCana also submitted another COGCC Form 10 and again indicated that the date of first sales was June 3, 2003 for the Well.

 

On June 1, 2004, COGCC staff issued an Administrative Order by Consent (“AOC”) to EnCana Oil & Gas (USA) Inc. for the violation of COGCC Rules 301., 318A.a. and 318.c., failure to obtain Commission approval for change of surface hole location and failure to obtain Commission approval for change of bottom hole location for the Well, failure to locate the Well in accordance with the Greater Wattenberg Area well location setback rules and failure to obtain a location exception for the Well.  On June 7, 2004, EnCana Oil & Gas (USA) Inc. agreed to and accepted the AOC, including a fine of Twenty Thousand Dollars ($20,000).

 

NOTICE IS HEREBY GIVEN, that the Oil and Gas Conservation Commission of the State of Colorado, pursuant to the above, has scheduled the above-entitled matter for hearing on:

                 

Date:                            Monday, July 12, 2004

 

Time:                           9:00 a.m.

 

Place:                          Suite 801, The Chancery Building

                                    1120 Lincoln Street

                                    Denver, CO 80203

                       

            In accordance with the Americans with Disabilities Act, if any party requires special accommodations for this hearing as a result of a disability, please contact Audra Serlet at (303) 894-2100, extension 114, prior to the hearing and arrangements will be made.

 

Pursuant to said hearing in the above-entitled matter at the time and place aforesaid, or at any adjourned meeting, the Commission will enter such orders as it deems appropriate and necessary to protect public health, safety and welfare and to prevent the waste of oil and gas, either or both, in the operations of said field, and carry out the purposes of the statute.

 

In accordance with Rule 509., any interested party desiring to protest or to intervene should file with the Commission a written protest or a notice to intervene no later than June 28, 2004 briefly stating the basis of the protest or intervention.  Such interested party shall, at the same time, serve a copy of the protest or notice to intervene to the person filing the application.  An original and nine (9) copies shall be filed with the Commission. Anyone who files a protest or intervention must be able to participate in a prehearing conference during the week of June 28, 2004. 

 

      IN THE NAME OF THE STATE OF COLORADO

 

                                                                  OIL AND GAS CONSERVATION COMMISSION

                               OF THE STATE OF COLORADO

 

 

 

                        By_________________________________

Dated at Suite 801                                                              Patricia C. Beaver, Secretary

1120 Lincoln Street

Denver, Colorado, 80203

June 8, 2004