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 SMITH OIL PROPERTIES INC, WELD AND ADAMS COUNTIES, COLORADO |
) ) ) ) ) |
CAUSE NO. 1V
ORDER
NO. 1V-457 |
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. Smith Oil Properties, Inc. (“Smith Oil”) (Operator No. 79905) is the operator of the following wells (“Wells”) located in Weld and Adams counties, Colorado.
Table 1
|
Well Name |
API No. |
Spud Date |
NOAV No. |
|
Andrews 13-18X |
05-123-09907 |
April 16, 1980 |
200392001 |
|
Andrews (Lanyard Waterflood) 22-18 |
05-123-08251 |
January 18, 1975 |
200392000 |
|
Lynn 1 |
05-001-08303 |
August 9, 1983 |
200391999 |
2. Based on a review of COGCC’s records, the Andrews 13-18X Well is shut-in. It has not produced since the beginning of COGCC electronic production records in January 1999 to the end of its records in November 2013. A mechanical integrity test (“MIT”) was not performed on this Well within two years of it becoming shut-in.
3. Based on a review of COGCC’s records, the Andrews (Lanyard Waterflood) 22-18 Well is shut-in. It has not produced since the beginning of COGCC electronic production records in January 1999 to the end of its records in November 2013. A MIT was not performed on this Well within two years of it becoming shut-in.
4. Based on a review of COGCC’s records, the Lynn 1 Well is shut-in. It has not produced since October 2011. A MIT was not performed on this Well within two years of it becoming shut-in.
5. On December 12, 2013, Commission Staff issued Notices of Alleged Violation (“NOAV’s”) identified in Table 1 above to Smith Oil citing violations 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”).
6. Following factual investigation and legal review of the violations alleged in the NOAV, Hearings Staff now asserts Smith Oil has committed the following violations:
Three single-day violations of Rule 326.b.1 (Mechanical Integrity Testing Shut-In Wells) for the failure to perform a Mechanical Integrity Test on the Well while Shut-In.
7. Smith Oil performed successful MIT’s on the Andrews 13-18X Well and Andrews 22-18 Well on March 20, 2014.
8. Smith Oil concludes it is in its best interest and the state’s best interest that the Wells be plugged and abandoned.
9. Pursuant to Rule 523 and the Commission’s Enforcement and Penalty Policy, Hearings Staff calculated a penalty of $3,000 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 Smith Oil agrees to settle the NOAV on the following terms and conditions:
I. Smith Oil will be assessed a penalty of $3,000.
II. Smith Oil will pay $3,000 within 30 days after this AOC is mailed by the Commission.
III. Smith Oil agrees to plug and abandon each of the three Wells within four months of the approval of this AOC, which includes:
a. Submitting Form 6’s, Notices of Intent to Abandon, to the COGCC for prior approval before proceeding with plugging and abandoning the Wells;
b. Submitting Form 6’s, Subsequent Report of Abandonment, to the COGCC after plugging and abandoning the Wells; and
c. Performing final reclamation consistent with Rule 1004.
IV. Payment of the penalty pursuant to this AOC does not relieve Smith Oil from its obligations to complete corrective actions set forth in the NOAV, as may be amended or modified by COGCC Staff.
V. Smith Oil agrees to the findings of this AOC only for the purpose of expeditiously resolving the matter without a contested hearing.
RECOMMENDED this day of April, 2014.
OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO
By
Peter J. Gowen, Enforcement Officer
AGREED TO AND ACCEPTED this ______day of April, 2014.
SMITH OIL PROPERTIES, INC
By
Signature of Authorized Company Representative
Print Signatory Name
Title
ORDER
HAVING CONSIDERED the Agreement between the Director and Smith Oil to resolve the NOAV, the COMMISSION ORDERS:
1. Smith Oil is found in violation of Rule 326.b.1 as described above.
2. Smith Oil is assessed a total penalty of $3,000 for the rule violations described above.
3. Smith Oil will pay $3,000 within 30 days after this AOC is mailed by the Commission.
4. Smith Oil will plug and abandon each of the three Wells within four months of the approval of this AOC, which includes:
a. Submitting Form 6’s, Notices of Intent to Abandon, to the COGCC for prior approval before proceeding with plugging and abandoning the Wells;
b. Submitting Form 6’s, Subsequent Report of Abandonment, to the COGCC after plugging and abandoning the Wells; and
c. Performing final reclamation consistent with Rule 1004.
5. Payment of the penalty pursuant to this AOC does not relieve Smith Oil from its obligations to complete corrective actions set forth in the NOAV, as may be amended or modified by COGCC Staff.
6. 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.
7. The Commission expressly reserves its right after notice and hearing, to alter, amend, or repeal any and/or all of the above orders.
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OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By
Robert J. Frick, Secretary