BEFORE THE OIL AND GAS CONSERVATION COMMISSION

                                                               OF THE STATE OF COLORADO

 

IN THE MATTER OF ALLEGED VIOLATIONS OF THE                       )                    CAUSE NO. 1V

RULES AND REGULATIONS OF THE COLORADO OIL                   )

AND GAS CONSERVATION COMMISSION BY                                   )                    ORDER NO. IV-261

PETROLEUM DEVELOPMENT CORPORATION,                           )

WELD COUNTY, COLORADO                                                            )

                                                                       

ADMINISTRATIVE ORDER BY CONSENT

 

FINDINGS

 

                       1.  On February 5, 2003, a Colorado Oil and Gas Conservation Commission (“COGCC”) Form 2, Application for Permit-to-Drill (“APD”) was approved for Petroleum Development Corporation (“PDC”) to drill the Knox #41-3 Well located in the NE¼ NE¼ of Section 3, Township 5 North, Range 67 West, 6th P.M.

 

                        2.  The APD for the Knox #41-3 Well specified the objective formation as the “J” Sand.  The APD was approved by the COGCC Director only for this formation.

 

                        3.  On May 29, 2003 the COGCC received from PDC a Completed Interval Report, Form 5A, for the Knox #41-3 Well.  The form stated that the Knox #41-3 Well had been completed in the Codell Formation and that the Codell Formation had been tested on May 15, 2003.

 

                        4.  On December 12, 2003, PDC contacted COGCC staff by letter and reported that the Codell Formation had been completed in the Knox #41-3 Well without proper APD approval.

                       

                        5.  For the unauthorized completion of the Codell Formation in the Knox #41-3 Well, PDC should be found in violation of Rule 303.b., failure to have an approved Application for Permit-to-Drill or Application for Permit to Recomplete to the Codell Formation, Rule 301., not providing written notice of intention to do work, and Section 34-60-117.(1) of the Oil and Gas Conservation Act, failure to protect correlative rights of all owners in every field or pool.

 

6.  Rule 523. specifies a base fine of One Thousand dollars ($1,000) per day for each violation of Rules 301. and 303., and a base fine for violations of the Oil and Gas Conservation Act shall be determined by the Commission at its discretion.

 

                        7.  A monetary penalty of Five Thousand dollars ($5,000.00) should be assessed against PDC, in accordance with Rule 523.a. and Rule 523.d., for violation of Rules 303.b., 301., and Section 34-60-117.(1) of the Oil and Gas Conservation Act.  An aggravating factor in determining the fine recommendation is that under Rule 523.d.(4) the violation had the potential to have a significant negative impact on correlative rights of other parties.  A mitigating factor in determining the fine recommendation is that under Rule 523.d.(1) the violator self-reported the violation.

 

                                                                                   ORDER

 

                        NOW, THEREFORE, IT IS ORDERED, that Petroleum Development Corporation shall be found in violation of Rule 303.b., failure to have an approved Application for Permit-to-Drill or Application for Permit to Recomplete to the Codell Formation, Rule 301., not providing written notice of intention to do work, and Section 34-60-117.(1) of the Oil and Gas Conservation Act, failure to protect correlative rights of all owners in every field or pool for the Knox #41-3 Well located in the NE¼ NE¼ of Section 3, Township 5 North, Range 67 West, 6th P.M.

 

                        IT IS FURTHER ORDERED, that Petroleum Development Corporation shall be assessed a fine of Five Thousand dollars ($5,000.00) payable within thirty (30) days of the date the order is approved by the Commission for violations occurring on the Knox #41-3 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.

 

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.

 

                        Recommended this               day of January, 2004.

 

 

                                                                        OIL AND GAS CONSERVATION COMMISSION

 

 

 

                                                                        By                                                                   

Morris J. Bell, Hearing Officer

Dated at Suite 801                 

1120 Lincoln Street                

Denver, Colorado  80203

January 2, 2004

 

                        AGREED TO AND ACCEPTED THIS _________DAY OF January, 2004.

 

                                                                                      PETROLEUM DEVELOPMENT CORPORATION

 

 

                                                                        By ____________________________________________

 

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