BEFORE THE OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

IN THE MATTER OF ALLEGED VIOLATIONS OF THE RULES AND REGULATIONS OF THE COLORADO OIL AND GAS CONSERVATION COMMISSION BY HYNDREX RESOURCES, ADAMS COUNTY, COLORADO

) ) ) ) )

CAUSE NO. 1V ORDER NO. 1V-453 DOCKET NO. 1403-OV-08

ADMINISTRATIVE ORDER BY CONSENT

(Pursuant to Rule 522.b.(3) of the Rules and Regulations of the

Colorado Oil and Gas Conservation Commission, 2 CCR 404-1)

FINDINGS

1. Hyndrex Resources (“Hyndrex”) (Operator No. 42640) is the operator of the following Wells in Adams County, Colorado:

Well Name	API No.	NOAV No.	Last Date of Production	Date MIT was Due
Ampet/Amoco 9-34	05-001-08885	200393530	11/2010	11/2012
9 Ampet-Amoco 1-1	05-001-08863	200393531	11/2010	11/2012

2. According to Commission staff records, these Wells have not produced from November 2010 until the end of production records in September 2013. A Mechanical Integrity Test (“MIT”) has never been performed on either of these Wells.

3. On January 8, 2014, Commission staff issued Hyndrex Notices of Alleged Violation ("NOAV’s") (Nos. 200393530; 200393531) for violations at the Wells of Rule 326.b.1 (Mechanical Integrity Testing, Shut-in Wells) of the COGCC Rules of Practice and Procedure, 2 CCR 404-1 (“Rule” or “Rules”).

4. Following a factual investigation and legal review of the violations alleged in the NOAV’s, the Hearings Staff now asserts Hyndrex has committed the following violations:

a. Two 10-day violations of Rule 326.b.1 because Hyndrex failed to conduct the required MIT at both Wells within two years of the Wells becoming Shut-in.

5. Pursuant to Rule 523 and the Commission’s Enforcement and Penalty Policy, Hearings staff calculated a penalty of $16,000 for these violations.  Staff does not recommend any adjustments based on aggravating or mitigating factors. 

AGREEMENT

NOW, THEREFORE, based on the Findings and pursuant to Rule 522.b.(3) and the Commission’s Enforcement and Penalty Policy, the Director proposes and Hyndrex agrees to settle the NOAV’s on the following terms and conditions:

1. Hyndrex will be assessed a penalty of $16,000.

II. Hyndrex will pay $16,000 within 30 days after the approved AOC is mailed by the Commission. 

III. Within 30 days after the entry of this AOC, Hyndrex will perform one of these two options at both Wells and notify Commission staff of which option Hyndrex chooses to exercise:

a. Pass an MIT to maintain Shut-in status. Hyndrex must also notify staff ten days prior to conducting the MIT on a Form 42 and submit a Form 21 within 30 days after the MIT if it is not witnessed by staff; OR

b. Submit a Form 6, Notice of Intent to Abandon, for prior approval before proceeding with plugging and abandoning the Wells.

IV. Payment of the penalty pursuant to this AOC does not relieve the operator from its obligations to complete corrective actions set forth in the NOAV’s, as may be amended or modified by COGCC Staff.

V. Hyndrex agrees to the findings of this AOC only for the purpose of expeditiously resolving the matter without a contested hearing.

RECOMMENDED this 6^th day of March 2014.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By

Peter J. Gowen, Enforcement Officer 

AGREED TO AND ACCEPTED this 4^th day of March, 2014.

                        HYNDREX RESOURCES

                        By

                        Signature of Authorized Company Representative

Print Signatory Name

                                    Title

ORDER

HAVING CONSIDERED the Agreement between the Director and Hyndrex to resolve the NOAV’s, the COMMISSION ORDERS:

1. Hyndrex is found in violation of Rule 326.b.1 at the two Wells as described above.

2. Hyndrex will be assessed a total penalty of $16,000 for the violations described above.

3. Hyndrex will pay $16,000 within 30 days after the Commission mails this Order.

4. Within 30 days after the entry of this AOC, Hyndrex will perform one of these two options at both Wells and notify Commission staff of which option Hyndrex chooses to exercise:

a. Pass an MIT to maintain Shut-in status. Hyndrex must also notify staff ten days prior to conducting the MIT on a Form 42 and submit a Form 21 within 30 days after the MIT if it is not witnessed by staff; OR

b. Submit a Form 6, Notice of Intent to Abandon, for prior approval before proceeding with plugging and abandoning the Wells.

5. Payment of the penalty pursuant to this AOC does not relieve Hyndrex from its ongoing obligations to complete remaining corrective actions as set forth the compliance schedule to be agreed upon with COGCC staff.

6. Hyndrex, or its successors or assigns, will remain responsible for complying with this AOC, in the event of any subsequent conveyance of the Well.

7. Entry of this Order constitutes final agency action for purposes of judicial review as of the date this order is mailed by the Commission. For all other purposes, this Order is effective as of the date of approval by the Commission.

8. An application for reconsideration by the Commission of this order is not required prior to the filing for judicial review.

9. 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  17^th  day of March, 2014, as of the  17^th  day of March, 2014.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By______________________________________

                                                Robert J. Frick, Secretary