IN THE MATTER OF ALLEGED VIOLATIONS OF THE RULES
CAUSE NO. 1
AND REGULATIONS OF THE COLORADO OIL AND GAS
CONSERVATION COMMISSION BY EROS, INC.,
ORDER NO. 1V-132
VILAS FIELD, BACA COUNTY, COLORADO
REPORT OF THE COMMISSION
This cause came on for hearing before the Commission at 8:30 a.m., on November
24, 1997, in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver,
Colorado, after giving Notice of Hearing as required by law, on why Eros, Inc.
is in violation of certain rules and regulations of the Oil and Gas Conservation
Commission and why the Commission 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. Eros, Inc. 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 January 25, 1994, Colorado Oil and Gas Conservation Commission (COGCC)
staff sent a letter to Eros, Inc. citing violations of Rule Nos. 317.b.1.,
317.b.3., and 324.b. for the following wells in Baca County:
Well Name Legal Location
Hefley #1-1 Well NE¼ SW¼, Section 1, Township 30 South, Range 44 West, 6th P.M.
Caldwell #1-12 Well NE¼ SW¼, Section 12, Township 30 South, Range 44 West, 6th
P.M.
Alford #1-14 Well NW¼ SE¼, Section 14, Township 30 South, Range 44 West, 6th
P.M.
Mangles #1 Well SW¼ NE¼, Section 15, Township 30 South, Range 44 West, 6th P.M.
Alford #2-22 Well SW¼ NE¼, Section 22, Township 30 South, Range 44 West, 6th
P.M.
Alford #3-23 Well SE¼ NW¼, Section 23, Township 30 South, Range 44 West, 6th
P.M.
The letter required that the wells pass a mechanical integrity test or be
properly plugged and abandoned by August 1, 1994. On May 27, 1994, COGCC staff
received a letter from Mr. E. L. Sorensen, Agent for Eros, Inc. Mr. Sorensen's
letter indicated that he did not believe Eros, Inc. operated the wells. On June
1, 1994 COGCC staff replied to Mr. Sorensen's letter and enclosed six (6) COGCC
Changes of Operator, Form 10s, changing the operator to Eros, Inc. for the six
(6) wells. The Form 10s were submitted by Mr. Pierce Parker, President of Eros,
Inc., and stated that the effective date of operator change was April 1, 1987.
On July 24, 1994, Mr. Pierce Parker, President of Eros, Inc. sent a letter to
COGCC staff indicating that he was seeking a service company to perform the
required work.
5. On April 30, 1996 COGCC staff issued Notices of Alleged Violation (NOAVs) to
Dr. Pierce Parker, President of Eros, Inc. for the six (6) wells listed above.
The NOAVs cited violations of Rule No. 317.b. (319.b. as of June 1, 1996),
failure to abandon a well which has ceased production within six (6) months and
failure to obtain Director approval for continuing shut-in status, and Rule No.
324.b. (326.b. as of June 1, 1996), failure to perform a mechanical integrity
test within two (2) years of initial shut-in date. Commission records indicate
that the six (6) wells have never produced since completion (September 1976
through March 1979). The NOAVs specified an abatement date of July 30, 1996. On
August 16, 1996, COGCC staff sent a letter to Dr. Pierce Parker, President of
Eros, Inc. The letter indicated that all six (6) wells had failed mechanical
integrity tests in July, 1996 and required that the wells either be repaired and
successfully pass mechanical integrity tests or be properly plugged and
abandoned by October 1, 1996.
6. On January 16, 1997, COGCC staff inspected the six (6) wells and determined
that none had been properly plugged and abandoned. On June 19, 1997, COGCC staff
issued an Administrative Order By Consent (AOC) to Dr. Pierce Parker, President
of Eros, Inc. The AOC was received on June 23, 1997 as indicated by the return
receipt. On July 3, 1997, the COGCC received a letter from G. Donohue Kane with
Gorsuch Kirgis L.L.C, Attorneys at Law. The letter indicated that the firm
represented Dr. Pierce Parker and stated that Eros, Inc. had been dissolved and
that Dr. Parker was not able to execute the AOC. As of August 20, 1997, the AOC
has not been executed and the COGCC has received no indication that the six (6)
wells have either passed mechanical integrity tests or been properly plugged and
abandoned.
7. At the time of the hearing, Commission staff provided testimony and presented
exhibits in support of the proposed order being recommended for adoption by the
Commission.
8. That COGCC staff considers the following to be aggravating factors for fine
determination: Rule Nos. 523.d.1., the violation was intentional or reckless;
523.d.2., the violation had threat of significant negative impact on public
health, safety, or welfare; 523.d.6., the violation involved recalcitrance upon
the part of the violator; and 523.d.8., the violation resulted in economic
benefit to the violator.
9. Based on the testimony presented, an order of the Commission should be
entered finding Eros, Inc., in violation of Rule 319.b., failure to abandon a
well which has ceased production within six (6) months and failure to obtain
Director approval for continuing shut-in status, and Rule 326.b., all shut-in
wells shall pass a mechanical integrity test, for the above-described wells. In
addition, a fine of Twenty-Four Thousand Dollars ($24,000) payable within thirty
(30) days from the date the order is issued, should be assessed. Further, if
Eros, Inc. does not comply with the order, staff should be authorized to
commence claim on the Thirty Thousand Dollar ($30,000) plugging bond.
ORDER
NOW THEREFORE, IT IS ORDERED, that Eros, Inc., is in violation of Rule 319.b.,
failure to abandon a well which has ceased production within six (6) months and
failure to obtain Director approval for continuing shut-in status, and Rule
326.b., all shut-in wells shall pass a mechanical integrity test, for the
below-described wells:
Well Name Legal Location
Hefley #1-1 Well NE¼ SW¼, Section 1, Township 30 South, Range 44 West, 6th P.M.
Caldwell #1-12 Well NE¼ SW¼, Section 12, Township 30 South, Range 44 West, 6th
P.M.
Alford #1-14 Well NW¼ SE¼, Section 14, Township 30 South, Range 44 West, 6th
P.M.
Mangles #1 Well SW¼ NE¼, Section 15, Township 30 South, Range 44 West, 6th P.M.
Alford #2-22 Well SW¼ NE¼, Section 22, Township 30 South, Range 44 West, 6th
P.M.
Alford #3-23 Well SE¼ NW¼, Section 23, Township 30 South, Range 44 West, 6th
P.M.
IT IS FURTHER ORDERED, that pursuant to §34-60-121(7), C.R.S., a knowing and
willful pattern of violation exists and Eros, Inc. or its successors under law,
or any company of which Dr. Pierce Parker is a principal shall not be issued any
new permits unless compliance with this order is reached.
IT IS FURTHER ORDERED, that Eros, Inc. shall be assessed a fine of Twenty-Four
Thousand Dollars ($24,000) payable within thirty (30) days from the date the
order is issued.
IT IS FURTHER ORDERED, that if Eros, Inc. does not comply with the order, staff
shall be authorized to commence claim on the Thirty Thousand Dollar ($30,000)
plugging bond.
IT IS FURTHER ORDERED, that if the Commission makes a claim on the plugging bond
and the plugging costs exceed the bond amount, the Commission shall confiscate
available equipment and tubulars for salvage per §34-60-124.(6)(c), C.R.S.
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 18th day of December, 1997, as of November 24, 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 December 18, 1997
(1V#132)