THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
IN THE MATTER OF A REQUEST TO APPEAL ) CAUSE NO. 1
OR AMEND ORDER NO. 1V-238 ISSUED TO )
MONUMENT GAS MARKETING, INC., ) ORDER NO. 1-121
KIOWA COUNTY, COLORADO )
REPORT OF THE COMMISSION
This cause came on for hearing before the Commission at 9:00 a.m. on November 5, 2007, in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver, Colorado, for an order to rescind Order No. 1V-238, or, in the alternative, revise Order No. 1V-238 so as to grant such other or further relief in law or equity which the Commission deems to be necessary or appropriate.
The Commission finds as follows:
1. Monument Gas Marketing, Inc. (“Monument”), as applicant herein, is an interested party in the subject matter of the above‑referenced hearing.
2. Due notice of the time, place and purpose of the hearing has been given in all respects as required by law.
3. The Commission has jurisdiction over the subject matter embraced in said Notice, and of the parties interested therein, and jurisdiction to promulgate the hereinafter prescribed order pursuant to the Oil and Gas Conservation Act.
4. On September 23, 2002, the Commission issued Order No. 1V-238, which ordered Monument Gas Marketing, Inc. (“Monument”) to re-enter the Bucklen #2-34 Well located in the SW¼ NW¼ of Section 34, Township 17 South, Range 46 West, 6th P.M. and properly plug the well “at a depth sufficient to protect the Cheyenne and Dakota Formations” no later than February 1, 2003.
5. On October 24, 2002, Monument filed with the Commission a Motion to Reconsider to either amend or repeal the subject Order No. 1V-238 and find that Monument is not in violation of Rule 319.a.(1) for the Bucklen #2-34 Well.
6. On January 6, 2003, the Commission heard Monument’s Motion for Reconsideration and issued Order No. 1-100, finding that Order No. 1V-238 should not be rescinded.
7. In March, 2003, Monument filed a complaint in state district court, Denver, Colorado, for judicial review of Order No. 1-100 and for an order to amend or repeal Order No. 1V-238. The district court dismissed Monument’s complaint with prejudice for lack of subject matter jurisdiction, finding that Monument’s complaint for judicial review of Order No. 1V-238 was untimely under the Colorado Administrative Procedure Act. Monument appealed the district court decision.
8. On February 2, 2006, the Colorado Court of Appeals affirmed the district court decision. Monument filed a petition for certiorari to the Colorado Supreme Court. The Court denied Monument’s petition.
9. On May 31, 2007, Monument, by its attorney, filed with the Commission a verified application requesting the Commission rescind Order No. 1V-238. Alternatively, Monument requested that the Commission revise Order No. 1V-238 so as to grant such other or further relief in law or equity which the Commission deems to be necessary or appropriate.
10. On June 13, 2007, Monument, by its attorney, filed with the Commission an amendment to the application correcting the lands to Township 17 South, Range 46 West, 6th P.M. On July 17, 2007, a written request was filed with the Commission to continue this matter to the August hearing, and the hearing in this matter was continued.
11. Monument hired Key Energy Services, Inc. to re-enter the Bucklen #2-34 Well and replace the plugs as ordered by the Commission. Key Energy Services, Inc. successfully drilled through the first four plugs. The drill bit skipped off of the fifth plug, however, resulting in a new hole being cut into the softer surrounding sand. Key Energy Services, Inc. was therefore unable to drill through the fifth plug because it was unable to prevent the drill bit from wandering into the new hole. Monument spent approximately $68,000 on this unsuccessful re-entry attempt.
12. Monument estimates that it would cost approximately $75,000 to $80,000 every time it subsequently attempted to re-enter the Bucklen #2-34 Well, because it is very likely that the drill bit would continue to wander into the new hole.
13. Monument asserts that the Commission’s plan for proper plugging and abandonment of the Bucklen #2-34 Well must take into consideration the “cost effectiveness and technical feasibility” of the plan. C.R.S. § 34-60-106(2)(d) (2006). Monument submits that additional re-entry attempts are neither cost-effective nor technically feasible.
14. At the time of the hearing, Jack A. McCartney, of McCartney Engineering, LLC, testified as an expert witness on behalf of Monument to the following:
(a) Monument utilized prudent industry practices designed to comply with the Order No. 1V-238 when it first attempted to re-enter and replug the Bucklen #2-34 Well;
(b) The water in the Cheyenne Formation, at the location of the Bucklen #2-34 Well, is not potable, and may very well exceed 3000 mg/l TDS at the location of the Bucklen #2-34 Well;
(c) Regardless, the Cheyenne Formation is protected by heavy drilling mud already present in the Bucklen #2-34 wellbore;
(d) Monument’s proposal to re-enter and replug the Bucklen #2-34 Well a second time was in accord with prudent industry practices;
(e) It would cost Monument a minimum of $137,300 to attempt a second re-entry and replugging of the Bucklen #2-34 Well, regardless of success; and
(f) Based on communication with one drilling source, it would be next to impossible to successfully re-enter and replug the Bucklen #2-34 Well a second time.
15. Based on the facts stated in the verified application and the testimony and exhibits presented at the hearing, the Commission found that there were no significant adverse environmental impacts which would necessitate the protection of the public health, safety, or welfare, taking into consideration the cost-effectiveness and technical feasibility of re-entering and replugging the Bucklen #2-34 Well a second time, and the Commission should enter an order to rescind Order No. 1V-238.
NOW, THEREFORE IT IS ORDERED, that Order No. 1V-238, is hereby rescinded.
IT IS FURTHER ORDERED, that the provisions contained in the above order shall become effective forthwith.
IT IS FURTHER ORDERED, that the Commission expressly reserves its right, after notice and hearing, to alter, amend or repeal any and/or all of the above orders.
IT IS FURTHER ORDERED, that under the State Administrative Procedure Act the Commission considers this order to be final agency action for purposes of judicial review within thirty (30) days after the date this order is mailed by the Commission.
IT IS FURTHER ORDERED, that an application for reconsideration by the Commission of this order is not required prior to the filing for judicial review.
ENTERED this__________day of November, 2007, as of November 5, 2007.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
Patricia C. Beaver, Secretary
Dated at Suite 801
1120 Lincoln Street
Denver, Colorado 80203
November 13, 2007