BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
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IN THE MATTER OF ALLEGED VIOLATIONS OF THE RULES AND REGULATIONS OF THE COLORADO OIL AND GAS CONSERVATION COMMISSION BY CCI PARADOX UPSTREAM, LLC, MONTROSE AND SAN MIGUEL COUNTIES, COLORADO |
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CAUSE NO. 1V
ORDER
NO. 1V-473 |
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. CCI Paradox Upstream, LLC (“CCI”) (Operator No. 10453) is the operator of the Wray Mesa #36-34-47-20 Well (API # 05-085-06049) located in Montrose County, Colorado (“WM Well”) and the Andy’s Mesa-Federal #6 Well (API # 05-113-06005) located in San Miguel County, Colorado (“AMF Well”).
WM Well
2. On April 11, 2014, after a review of COGCC records, Commission Staff issued Notice of Alleged Violation (“NOAV”) No. 200401847 to CCI citing a violation of COGCC Rules of Practice and Procedure, 2 CCR 404-1 (“Rule” or “Rules”), Rule 326.b.1 (Mechanical Integrity Testing Shut-In Wells), at the WM Well (the “WM NOAV”).
3. Based on a review of COGCC’s records in April, 2014, it was determined that the WM Well was temporarily abandoned and a mechanical integrity test (“MIT”) had never been performed on the WM Well. However, based on the most recent available information, it has been determined that an MIT was conducted and the WM Well was plugged and abandoned in June, 2014, pursuant to the process required by the United States Department of the Interior, Bureau of Land Management (the “BLM Process”).
AMF Well
4. Based on a review of COGCC’s records, and following consultation with CCI, it was determined that the AMF Well lacked mechanical integrity. The AMF Well was not repaired, or plugged and abandoned, within six months of CCI learning that the AMF Well lacked mechanical integrity. The AMF Well has now been plugged and abandoned pursuant to the BLM Process.
5. On May 29, 2014, Commission Staff issued NOAV No. 02618205 to CCI citing a violation of Rule 326.d (Mechanical Integrity Required Of All Wells), at the AMF Well (the “AMF NOAV”).
6. Pursuant to the AMF NOAV, CCI was required to review its well files and determine whether additional wells lacked mechanical integrity and to implement procedures to ensure that wells lacking mechanical integrity are repaired or plugged and abandoned as required by Rule 326.d. CCI has complied with this requirement.
Enforcement Proceedings
7. Following factual investigation and legal review of the violations alleged in the NOAVs, Enforcement Staff now asserts CCI has committed the following violations:
a. One, 10-day violation of Rule 326.b.1 (Mechanical Integrity Testing Shut-In Wells) for the failure to perform a Mechanical Integrity Test on the WM Well.
b. One, 10-day violation of Rule 326.d (Mechanical Integrity Required Of All Wells) for the failure to repair, or plug and abandon, the AMF Well.
8. Pursuant to Rule 523 and the Commission’s Enforcement and Penalty Policy, Hearings Staff calculated a penalty of $18,000 for these violations.
AGREEMENT
NOW, THEREFORE, based on the Findings and assertions set forth above, and pursuant to Rule 522.b.(3) and the Commission’s Enforcement and Penalty Policy, the Director proposes and CCI agrees to settle the NOAV on the following terms and conditions:
II. CCI does not admit or deny the Findings and assertions made in this AOC
III. Payment of the penalty pursuant to this AOC does not relieve CCI of its obligations to complete corrective actions set forth in the AMF NOAV or the WM NOAV, as may be amended or modified by COGCC Staff.
IV. CCI agrees to make payment hereunder only for the purpose of expeditiously resolving the matter.
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.
CCI PARADOX UPSTREAM, LLC
By
Signature of Authorized Company Representative
Print Signatory Name
Title
ORDER
HAVING CONSIDERED the Agreement between the Director and CCI to resolve the NOAV, the COMMISSION ORDERS:
1. CCI will pay a penalty of $18,000 within 30 days after this AOC is mailed by the Commission in settlement of the Findings made in this AOC
2. Payment of the penalty pursuant to this AOC does not relieve CCI of its obligations to complete corrective actions set forth in the AMF NOAV or the WM NOAV, as may be amended or modified by COGCC Staff.
3. 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.
4. 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