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 PETRO MEX RESOURCES, GARFIELD COUNTY, COLORADO |
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CAUSE NO. 1V
ORDER
NO. 1V-469 |
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. Petro Mex Resources (“Petro Mex”) (Operator No. 10059) is the operator of the Government 6 Well (API No. 05-045-06779) and Government 9 Well (API No. 05-045-06772) in Garfield County (collectively “Wells”).
2. Based on a review of COGCC records, the Government 6 Well is Shut-In. This Well has not produced from at least January 1999 until the end of its production records in May 2013. A Mechanical Integrity Test (“MIT”) has never been performed on this Well.
3. Based on a review of COGCC records, the Government 9 Well is Shut-In. This Well has not produced from at least January 1999 until the end of its production records in May 2013. A Mechanical Integrity Test (“MIT”) has never been performed on this Well.
4. On April 10, 2014, Commission Staff issued a Notice of Alleged Violation (“NOAV’s”) Nos. 200401345 and 200401344 to Petro Mex citing violations of the following COGCC Rules of Practice and Procedure, 2 CCR 404-1 (“Rule” or “Rules”).
a. Rule 326.b.1 (Mechanical Integrity Testing, Shut-in Wells); and
b. Rule 309 (Form 7, Operator’s Monthly Production Report).
5. Following factual investigation and legal review of the violations alleged in the NOAV, Hearings Staff now asserts Petro Mex has committed the following violations:
a. Two 10-day violations of Rule 326.b.1 (Mechanical Integrity Testing Shut-In Wells) for the failure to perform a Mechanical Integrity Test on the Wells within two years of the Wells becoming Shut-In.
b. Two 10-day violations of Rule 309 (Form 7, Operator’s Monthly Production Report) for failure to file a Form 7, Monthly Operator’s Monthly Production Report, for more than 10 months at each Well.
6. Pursuant to Rule 523 and the Commission’s Enforcement and Penalty Policy, Hearings Staff calculated a penalty of $38,000 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 Petro Mex agrees to settle the NOAV on the following terms and conditions:
II. Petro Mex will pay $23,000 within 30 days after this AOC is mailed by the Commission. The remaining $15,000 of the penalty will be suspended pending Petro Mex’s compliance with Rule 309 for a year following the date this AOC is approved. If Petro Mex complies, the suspended portion of the penalty will be vacated. If Petro Mex fails to comply, the suspended penalty will become due upon demand by the Director without further action by the Commission.
III. Petro Mex will do one of the following at each Well, and notify COGCC staff of which option it decides to pursue, within 30 days of the date of the hearing approving this AOC:
a. Pass a MIT to maintain shut-in status. Petro Mex must notify staff 10 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. Pass a MIT and reestablish production. Petro Mex must notify staff 10 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. Petro Mex must also file timely Form 7, Operator’s Monthly Production Reports; or
c. Plug and Abandon the Well. Petro Mex must submit a Well Abandonment Report on Form 6, Notice of Intent to Abandon, for prior approval before immediately proceeding with plugging and abandoning the Well. If a MIT is performed and the Well lacks mechanical integrity, the casing repair procedures must be approved by COGCC staff on a Form 4, Sundry Notice, prior to remediation per Rule 317.d.
IV. Payment of the penalty pursuant to this AOC does not relieve Petro Mex from its obligations to complete corrective actions set forth in the NOAV, as may be amended or modified by COGCC Staff.
V. Petro Mex agrees to the findings of this AOC only for the purpose of expeditiously resolving the matter without a contested hearing.
RECOMMENDED this 30th day of May, 2014.
OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO
By
Peter J. Gowen, Enforcement Officer
AGREED TO AND ACCEPTED this ______day of May, 2014.
PETRO MEX RESOURCES
By
Signature of Authorized Company Representative
Print Signatory Name
Title
ORDER
HAVING CONSIDERED the Agreement between the Director and Petro Mex to resolve the NOAV, the COMMISSION ORDERS:
1. Petro Mex is found in violation of Rule 326.b.1 as described above.
2. Petro Mex is assessed a total penalty of $38,000 for the rule violations described above.
3. Petro Mex will pay $23,000 within 30 days after this AOC is mailed by the Commission. The remaining $15,000 of the penalty is suspended pending Petro Mex’s compliance with Rule 309 for a year following the date this AOC is approved. If Petro Mex complies, the suspended portion of the penalty will be vacated. If Petro Mex fails to comply, the suspended penalty will become due upon demand by the Director without further action by the Commission.
4. Petro Mex will do one of the following at each Well, and notify COGCC staff of which option it decides to pursue, within 30 days of the date of the hearing approving this AOC:
a. Pass a MIT to maintain shut-in status. Petro Mex must notify staff 10 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. Petro Mex must also file timely Form 7, Operator’s Monthly Production Reports; or
b. Pass a MIT and reestablish production. Petro Mex must notify staff 10 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. Petro Mex must also file timely Form 7, Operator’s Monthly Production Reports; or
c. Plug and Abandon the Well. Petro Mex must submit a Well Abandonment Report on Form 6, Notice of Intent to Abandon, for prior approval before immediately proceeding with plugging and abandoning the Well. If a MIT is performed and the Well lacks mechanical integrity, the casing repair procedures must be approved by COGCC staff on a Form 4, Sundry Notice, prior to remediation per Rule 317.d.
5. Payment of the penalty pursuant to this AOC does not relieve Petro Mex 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