IN THE MATTER OF ALLEGED VIOLATIONS OF THE RULES
CAUSE NO. 1
AND REGULATIONS OF THE COLORADO OIL AND GAS
CONSERVATION COMMISSION BY PLENERGY
ORDER NO. 1V-131
DEVELOPMENT LTD., ADAMS COUNTY, COLORADO
REPORT OF THE COMMISSION
This cause came on for hearing before the Commission on October 21, 1997, at
8:30 a.m., in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver,
Colorado, after giving Notice of Hearing as required by law, on why Plenergy
Development Ltd. is in violation of Rule 319.b.(3), failure to obtain Director
approval for continuing shut-in status, and Rule 326.b., failure to perform a
mechanical integrity test within two (2) years of initial shut-in date for the
United Bank of Denver #3 Well located in the NE¼ SW¼ of Section 14, Township 1
South, Range 67 West, 6th P.M., and why it should not invoke the provisions of
§34-60-121 C.R.S., as amended, providing for penalties for violations of the
Rules and Regulations of the Commission.
FINDINGS
The Commission finds as follows:
1. Plenergy Development Ltd. 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.
4. On September 2, 1996, COGCC staff conducted a routine inspection of the
United Bank of Denver #3 Well located in the NE¼ SW¼ of Section 14, Township 1
South, Range 67 West, 6th P.M. The well was determined to be incapable of
production as a result of the surface production equipment being removed. On
September 6, 1996, COGCC staff issued a Notice of Alleged Violation (NOAV) to
Plenergy Development Ltd. ("Plenergy") for the United Bank of Denver #3 Well.
The NOAV cited violation of Rule 319.b.(3), failure to obtain Director approval
for continuing shut-in status and Rule 324.b., failure to perform a mechanical
integrity test within two (2) years of initial shut-in date. Commission records
indicate that the well has not produced since November 1994. The NOAV specified
an abatement date of March 5, 1997. Per return receipt, the NOAV was accepted on
September 10, 1996. On February 4, 1997, COGCC staff contacted Mr. Bob Baker
with Plenergy by telephone. Mr. Baker was reminded of the available options and
upcoming compliance deadline for the well. On February 19, 1997, in a telephone
conversation with Mr. Baker, COGCC staff granted a sixty (60) day extension
until May 5, 1997. Mr. Baker indicated the well had a casing leak within the
interval of 3,800-4,000’. The extension would give him additional time to
evaluate new methods of repairing the casing leaks in the well. On May 7, 1997,
Mr. Baker requested plugging orders for the United Bank of Denver #3 Well. Mr.
Baker indicated the well would be plugged within thirty (30) days. On June 6,
1997, COGCC staff inspected the well and found it was still in noncompliance. On
June 10, 1997, COGCC staff contacted Mr. Baker by telephone. He was informed
that an Administrative Order of Consent (AOC) would be issued if the well was
not brought into compliance immediately. Mr. Baker said the work would commence
on Monday, June 16, 1997. On June 17, 1997, COGCC staff inspected the well and
found it was still in noncompliance.
5. On June 19, 1997, an AOC was proposed to Plenergy. On August 21, 1997, the
AOC was signed by Bob Baker, President of Plenergy.
6. An order of the Commission should be entered finding Plenergy in violation of
Rule 319.b.(3)., failure to obtain Director approval for continuing shut-in
status and Rule 326.b., failure to perform a mechanical integrity test within
two (2) years of initial shut-in date for the United Bank of Denver #3 Well
located in the NE¼ SW¼ of Section 14, Township 1 South, Range 67 West, 6th P.M.,
and assessing a fine of two thousand dollars ($2,000) payable within thirty (30)
days from the date the order is issued.
O R D E R
NOW, THEREFORE, IT IS ORDERED, that Plenergy Development Ltd. shall be found in
violation of Rule 319.b.(3)., failure to obtain Director approval for continuing
shut-in status and Rule 326.b., failure to perform a mechanical integrity test
within two (2) years of initial shut-in date for the United Bank of Denver #3
Well located in the NE¼ SW¼ of Section 14, Township 1 South, Range 67 West, 6th
P.M.
IT IS FURTHER ORDERED, that Plenergy Development Ltd. shall be assessed a fine
of two thousand dollars ($2,000) payable within thirty (30) days from the date
the order is issued.
IT IS FURTHER ORDERED, that Plenergy Development Ltd. shall be required to
either: 1) perform a successful mechanical integrity pressure test; or 2)
properly plug and abandon; or 3) return to production within thirty (30) days of
the date the order is entered.
IT IS FURTHER ORDERED, that if Plenergy Development Ltd. does not comply with
this Order, the Commission staff shall make a claim on the blanket plugging bond
to properly plug and abandon the well. If plugging costs exceed the bond amount,
Commission staff shall confiscate available equipment and tubulars for salvage.
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.
ENTERED this 12th day of November, 1997, as of October 21, 1997.
OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO
By Patricia C. Beaver, Secretary
Dated at Suite 801, 1120 Lincoln Street Denver, Colorado 80203 November 12, 1997
(1V#131)