BEFORE THE OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

SIMPLE ADMINISTRATIVE ORDER BY CONSENT (AOC)

I.          Operator Information:

Operator Name: Booco’s Contract Services Inc. (“Booco’s” or “Operator”)

Operator Number: #9006

II.         NOAV Information: 

NOAV  NO. 200317248

Date of NOAV: August  8, 2011

Well Name: Grassy Creek Coal Co #1 (API: 05-107-06042)

Alleged Violations:  319.b.(3); 326.b.(1); 603.j.

III.        Summary of Alleged Violations:

A.        Booco’s is in violation of Rule 319.b.(3) which states that a well which has ceased production or injection and is incapable of production or injection shall be abandoned within six months thereafter unless the time is extended by the Director upon application by the owner.  The last reported production for this well was in June 2008.  Therefore, the well has not produced for over four and one half years. Booco’s reports that there is a piece of well equipment stuck at about 1900 feet and that the well cannot be produced until the stuck equipment is removed.  The well is out of compliance because it has not produced in four and a half years and is incapable of production.  To be brought into compliance the well must either be returned to production, pass a mechanical integrity test, or be plugged and abandoned.

B.        Booco’s is in violation of Rule 326.b.(1) which states that a mechanical integrity test shall be performed on each shut-in well within two (2) years of the initial shut in date.  Rule 326.b.(1) also states that if, at any time, surface equipment is removed or the well becomes incapable of production, a mechanical integrity test must be performed within thirty (30) days.  The subject well is not in compliance because it has not produced in over four and a half years and has not been capable of production since at least August 2011.  To be brought into compliance the well must either be returned to production, pass a mechanical integrity test, be plugged and abandoned.

C.        Booco’s is in violation of Rule 603.j which states in part: All locations, including wells and surface production facilities, shall be kept free of the following: equipment, vehicles, and supplies not necessary for use on that lease; weeds; rubbish, and other waste material.  The Notice of Alleged Violation specifically mentions a collapsed pump house and trash on the location. 

IV.       Base Fine Calculation

Section 34-60-121 (1) C.R.S. specifies a base fine for permit violations as $1,000 per day, further stating the maximum penalty for any single violation shall not exceed $10,000 unless the violation results in significant waste of oil and gas resources, damage to correlative rights, or a significant adverse impact on public health, safety or welfare or the environment. Staff does not allege that the violation resulted in significant waste of oil and gas resources, damage to correlative rights, or a significant adverse impact on public health, safety or welfare or the environment.

V.        Settlement of NOAV

The parties agree to resolve the subject NOAV as follows:

1.    Booco’s shall either plug and abandon the well, or returned it to production by July 1, 2013.

2.    If well is to be returned to production, the well must pass a mechanical integrity test prior to any new production.  This mechanical integrity test must be witnessed by a COGCC representative.

3.    Well plugging and abandonment must be performed consistent with Rules 319, 1004, and other applicable rules.

4.    All equipment not necessary for production shall be removed from the location by July 1, 2013.

5.    Booco’s shall file all delinquent Operator’s Monthly Reports of Operations (Form 7s) no later than 30 days from the date this AOC is approved by Commission.

6.    Payment of a fine of $ 10,000.00 as follows:

Imposition of a total fine of $10,000, of which $5,000 shall be payable no later than 30 days from the date this AOC is approved by the Commission. The remaining $5,000 shall be suspended, pending successful completion of proper plugging and abandonment or return to production of the well by the deadline established in paragraph 1 above.  If Booco’s successfully completes the proper plugging and abandonment or produces the well by the deadline established in paragraph 1 above, the suspended $5,000 portion of the fine shall be vacated. If Booco’s fails to complete the proper plugging and abandonment or produces the well by the deadline established in paragraph 1 above, the suspended $5,000.00 portion of the fine shall become due and payable upon 30 days notice by the Director.

7.   Payment of the full fine described in paragraph 6 above, shall not relieve operator from complying with requirements of NOAV.

8.   Failure to comply with the terms of this Order shall be considered a violation of §34-60-121 C.R.S. and may result in the imposition of additional fines and other remedies as permitted by law.

9.   The deadlines in this consent order may only be extended by the Director upon good cause shown by Booco’s. A time extension will only be granted for extraordinary events beyond the control of Booco’s.

10.Pursuant to Rule 522.c.(3), Booco’s agrees to the findings of this AOC for the purpose of     expeditiously resolving the matter without a contested hearing, and agreement to this AOC shall not constitute an admission of the alleged violation for any other purpose. 

Recommended this  28^th     day of January 2013.

OIL AND GAS CONSERVATION COMMISSION

                                                                        OF THE STATE OF COLORADO

                                    Peter J. Gowen, Enforcement Officer                                         

AGREED TO AND ACCEPTED this ______day of January, 2013.

BOOCO’S CONTRACT SERVICES INC.

By                                                                  

Signature of Authorized Officer

Printed Name of Authorized Officer

Title

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The Commission heard this matter on February 11, 2013, in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver, Colorado, and approved this Administrative Order by Consent. It is now a binding Order of the Commission.

ENTERED this _____ day of February 2013, as of the   11^th  day of February 2013.        

                                                                        OIL AND GAS CONSERVATION COMMISSION

                        OF THE STATE OF COLORADO

                        By____________________________________

                                                                                    Robert J. Frick, Secretary