BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
IN THE MATTER OF ALLEGED VIOLATIONS OF THE ) CAUSE NO. 1
RULES AND REGULATIONS OF THE COLORADO OIL )
AND GAS CONSERVATION COMMISSION BY JOHN H. ) ORDER NO. 1-77
CHILSON AND JENEX PETROLEUM CORPORATION, )
LARIMER COUNTY, COLORADO )
REPORT OF THE COMMISSION
This cause came on for hearing before the Commission on August 17, 1998, at 8:30 a.m. in Suite 801, the Chancery Building, 1120 Lincoln Street, Denver, Colorado, pursuant to the Commission's request for an update on activities that have occurred in reference to Order No. 1-66 originally issued on February 11, 1997.
The Commission finds as follows:
1. John H. Chilson and Jenex Petroleum Corporation are interested parties in the subject matter of the above‑referenced hearing.
2. The Commission has jurisdiction over the subject matter and of the parties interested therein, and jurisdiction to promulgate the hereinafter prescribed order.
3. On February 11, 1997, the Commission issued Order No. 1-66, which found that John H. Chilson is the owner of the Chilson No. 16-1 Well located in the NW¼ NW¼ of Section 16, Township 5 North, Range 68 West, 6th P.M.; Mr. Chilson and Jenex Petroleum Corporation are each responsible parties for the well and shall therefore be responsible for fifty percent (50%) of costs for plugging and abandonment of the well; Jenex is to manage the plugging and abandonment of the well; and Jenex shall oversee the establishment of an acceptable escrow account to cover the costs of plugging and abandonment of the well.
4. At the time of the November 24, 1997 hearing, after a report from the Assistant Attorney General regarding the status of this matter, stating that an acceptable escrow account had not been established and the well has not been plugged and abandoned, the Commission docketed this matter for hearing for the enforcement of the above-referenced Order. At the time of the February 9, 1998 hearing, Jenex submitted a letter requesting a continuance to the March hearing and a request that Mr. Chilson deposit his share of the plugging costs into the existing escrow account or into one of an attorney of his choice so that the well could be plugged. The Commission continued this matter to the March hearing, pending further action and the hearing in this matter was rescheduled. At the time of the March hearing, the Commission was informed that Mr. Chilson had deposited his share into the escrow account established by Jenex and that plugging operations would commence as soon as possible and the hearing in this matter was rescheduled.
5. Plugging operations were commenced May 5, 1998 in accordance with COGCC requirements, however, gas flow was occurring which caused a breach at the base of the surface casing plug. COGCC staff required additional procedures to ensure plug integrity. The well was successfully plugged and abandoned on June 27, 1998. However, site restoration was not been completed and the hearing in this matter was rescheduled.
6. At the time of the August 17, 1998 hearing, after deliberation by the Commission, it was determined that the original Order No. 1-66 should be amended to acknowledge the party holding the escrow account and to establish a date by which the Chilson No. 16-1 well site should be properly reclaimed.
NOW, THEREFORE, IT IS ORDERED, that the Colorado Oil and Gas Conservation Commission hereby amends Order No. 1-66 to acknowledge the establishment of the escrow account at a law firm rather than a third party financial institution.
IT IS FURTHER ORDERED, that the Colorado Oil and Gas Conservation Commission hereby amends Order No. 1-66 to establish January 1, 1999 as the date by which the Chilson No. 16-1 well site shall be properly reclaimed.
IT IS FURTHER ORDERED, that the provisions contained in the above order shall become effective on the date the order is entered.
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.
ENTERED this day of August, 1998, as of August 17, 1998.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
Patricia C. Beaver, Secretary
Dated at Suite 801
1120 Lincoln Street
Denver, Colorado 80203
August 27, 1998