IN THE MATTER OF ALLEGED VIOLATIONS OF THE
CAUSE NO. 1
RULES AND REGULATIONS OF THE COLORADO OIL
AND GAS CONSERVATION COMMISSION BY
PLENERGY DEVELOPMENT LTD., SPINDLE FIELD,
ORDER NO. 1V-193
ADAMS COUNTY, COLORADO
REPORT OF THE COMMISSION
This cause came on for hearing before the Colorado Oil and Gas Conservation
Commission on February 15, 2000 at 8:30 a.m. at the Holiday Inn, Trinidad, 3125
Toupal Drive, Trinidad, Colorado after giving Notice of Hearing as required by
law on why Plenergy Development Ltd. is not 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 thirty (30) days
of removing the surface production equipment from the Ehler #12 Well located in
the NW¼ SW¼ of Section 10, Township 1 South, Range 67 West, 6th P.M.
FINDINGS
1. Plenergy Development Ltd. (“Plenergy”) 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 and of the parties
interested therein, and jurisdiction to promulgate the hereinafter prescribed
order.
4. On September 25, 1998, Colorado Oil and Gas Conservation Commission (“COGCC”)
staff conducted an inspection of the Ehler #12 Well located in the NW¼ SW¼ of
Section 10, Township 1 South, Range 67 West, 6th P.M. The well was determined to
be incapable of production as a result of insufficient tubing/casing flow
pressure to overcome the sales line pressure.
5. On September 28, 1998, COGCC staff issued a Notice of Alleged Violation (“NOAV”)
to Plenergy for the Ehler #12 Well. The NOAV cited 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 thirty (30) days
for a well incapable of production. The NOAV specified an abatement date of
March 27, 1999. Per return receipt, the NOAV was accepted on September 29, 1998.
6. On June 2, 1999, COGCC staff conducted an inspection on the Ehler #12 Well
and was informed that the well had been repaired and was capable of production.
The operator requested an extension to allow replacement of the gas engine with
an electric motor to reduce excessive noise levels. COGCC staff extended the
abatement deadline to July 1, 1999. On August 11, 1999, COGCC staff met with the
operator at the Ehler #12 Well. Due to a heavy rainstorm the previous night, it
was agreed to postpone the start up of the well until more favorable site
conditions existed.
7. On September 10, 1999, COGCC staff inspected the Ehler #12 Well and
determined it was incapable of production and remained in noncompliance. On
September 16, 1999, COGCC staff issued an Administrative Order by Consent (“AOC”)
to Plenergy for the Ehler #12 Well. The AOC cited 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 thirty (30) days
for a well incapable of production. The AOC proposed the assessment of a total
fine amount of Two Thousand dollars ($2,000.00) and required the well to either
pass a mechanical integrity pressure test, be properly plugged and reclaimed or
returned to production within thirty (30) days from the date the order was
entered. On October 21, 1999, the AOC issued to Plenergy Development Ltd. was
returned to the COGCC as “unclaimed”. Plenergy did not execute or meet with
COGCC staff to discuss the proposed AOC for the Ehler #12 Well.
8. At the time of the hearing on February 15, 2000 COGCC staff presented
testimony and exhibits in support of the above findings. COGCC staff further
testified that notice of the hearing was sent via certified mail to Plenergy
Development Ltd. and to Planet Indemnity Company, provider of Plenergy’s
financial assurance posted with the COGCC.
9. The Director requests that the Commission issue an Order Finding Violation in
accordance with Rule 522.c. for the above-described alleged violations. In
addition, Plenergy should be assessed a total fine of Four Thousand dollars
($4,000.00) for violation of Rules 319.b.(3) and 326.b. for the Ehler #12 Well,
payable within thirty (30) days of the date the order is entered. Plenergy
should be required to either: 1) perform a successful mechanical integrity
pressure test; or 2) properly plug, abandon and reclaim; or 3) return to
production within thirty (30) days of the date the order is entered for the
Ehler #12 Well. Further, if Plenergy does not comply with the order, COGCC staff
should be authorized to commence a claim on the Thirty Thousand dollar ($30,000)
plugging bond and proceed to plug, abandon and reclaim the well.
ORDER
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 thirty (30) days for a well incapable of production on the Ehler #12 Well
located in the NW¼ SW¼ of Section 10, Township 1 South, Range 67 West, 6th P.M.
IT IS FURTHER ORDERED, that Plenergy Development Ltd. shall be assessed a total
fine of Four Thousand dollars ($4,000.00) for violation of Rules 319.b.(3) and
326.b. for the Ehler #12 Well, payable within thirty (30) days of the date the
order is entered.
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, abandon and reclaim; or 3) return to production the Ehler #12
Well within thirty (30) days of the date this order is entered.
IT IS FURTHER ORDERED, that if Plenergy Development Ltd. does not comply with
the order, COGCC staff shall be authorized to commence a claim on the Thirty
Thousand dollar ($30,000) plugging bond and proceed to plug, abandon and reclaim
the Ehler #12 Well.
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 13th day of March, as of February 15, 2000.
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 March 13, 2000.
(1V#193)