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 K.P. KAUFFMAN COMPANY, INC., WELD, ARAPAHOE AND ADAMS COUNTIES, COLORADO |
) ) ) ) ) ) |
CAUSE NO. 1V
ORDER
NO. 1V-465 |
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. K.P. Kauffman Company, Inc. (“Kauffman”) (Operator No. 46290) is the operator of the Wells identified in Table 1, located in Weld, Arapahoe and Adams Counties, Colorado.
Table 1
|
Well Name |
API # |
|
LAMBERT #1 |
05-001-08344 |
|
CRISSMAN #1-26 |
05-001-06577 |
|
STATE #2-26 |
05-005-06628 |
|
SIERRA-MURPHY #31-5 |
05-005-06969 |
|
STATE 3-26 |
05-005-06677 |
|
MURPHY ET AL 31-3 |
05-005-06958 |
|
1415 CORP. UNIT F #1 |
05-123-09014 |
|
TOM L. RUSSELL #1 |
05-123-07523 |
|
PAUL W. HEINZE #2 |
05-123-08796 |
|
JOHN LAMAR GAS UNIT #1 |
05-123-07534 |
|
GLEN HORTON #1 |
05-123-08449 |
|
GAULKE #1 |
05-123-07612 |
|
GAULKE #2 |
05-123-09276 |
|
CARY WALKLING UNIT A #1 |
05-123-09818 |
|
ALVIN VONASEK UNIT C #2 |
05-123-08940 |
|
KIYOTA #1 |
05-123-09267 |
|
TOM L. RUSSELL UNIT E 1 |
05-123-08652 |
|
BILLINGS 21-7 |
05-123-23758 |
|
MONTGOMERY 1-27 |
05-123-11985 |
2. Based on a review of COGCC’s records, these Wells are past due for a mechanical integrity test (“MIT”).
3. On November 26, 2013, Commission Staff issued a Notice of Alleged Violation (“NOAV”) (No. 200390427) to Kauffman citing violations of the following COGCC Rules of Practice and Procedure, 2 CCR 404-1 (“Rule” or “Rules”), Rule 326.b.1 (Mechanical Integrity Testing Shut-In Wells).
3. On December 1, 2013, Commission Staff issued multiple NOAVs (Nos. 200390425, 200390413, 200390395, 200390392, 200390428, 200390422, 200390406, 200390403, 200390397, 200390398, 200390394, 200390393 and 200390411) to Kauffman citing violations of Rule 326.b.1
4. Following issuance of these NOAVs, and in consultation with Kauffman, Commission Staff determined that an additional five wells are past due for MITs. Kauffman has agreed to include these wells in this AOC despite the fact that NOAVs were not issued.
5. Following factual investigation and legal review of the violations alleged in the NOAVs, Enforcement Staff now asserts Kauffman has committed fourteen, 10-day violations of Rule 326.b.1 for failing to perform MITs on the shut-in wells.
6. Pursuant to Rule 523 and the Commission’s Enforcement and Penalty Policy, Enforcement Staff is pursuing a penalty of $117,500 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 Kauffman agrees to settle the NOAVs on the following terms and conditions:
II. Kauffman will pay $84,500 within 30 days after the Commission mails the Order approving this AOC. The remaining $33,000 will be suspended provided Kauffman complies with the requirements specified in this AOC. Assuming compliance is achieved, the suspended penalty will be vacated. If Kauffman fails to fully comply, the suspension will be lifted, and the remaining $33,000 penalty will become due upon demand by the Director without further action by the Commission.
III. Kauffman will MIT or Plug and Abandon (“P&A”) the nineteen, non-compliant wells before December 31, 2014.
IV. Payment of the penalty pursuant to this AOC does not relieve Kauffman of its obligations to complete corrective actions set forth in the NOAVs, as may be amended or modified by COGCC Staff.
V. Kauffman agrees to the findings of this AOC only for the purpose of expeditiously resolving the matter without a contested hearing.
RECOMMENDED this day of , 2014.
OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO
By
Jeremy I. Ferrin, Enforcement Officer
AGREED TO AND ACCEPTED this ______day of , 2014.
K.P. KAUFFMAN COMPANY, INC.
By
Signature of Authorized Company Representative
Print Signatory Name
Title
ORDER
HAVING CONSIDERED the Agreement between the Director and Kauffman to resolve the NOAV, the COMMISSION ORDERS:
1. Kauffman is found in violation of Rules 326.b.1 as described above.
2. Kauffman is assessed a total penalty of $117,500 for the rule violations described above.
3. Kauffman will pay $84,500 within 30 days after the Commission mails the Order approving this AOC. The remaining $33,000 will be suspended provided Kauffman complies with the requirements specified in this AOC. Assuming compliance is achieved, the suspended penalty will be vacated. If Kauffman fails to fully comply, the suspension will be lifted, and the remaining $33,000 penalty will become due upon demand by the Director without further action by the Commission.
4. Kauffman will MIT or P&A the nineteen, non-compliant wells before December 31, 2014.
5. Payment of the penalty pursuant to this AOC does not relieve Kauffman of 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