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 CHARLES P. DUNNING LLC, ADAMS COUNTY, COLORADO |
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CAUSE NO. 1V DOCKET NO. 150500257 TYPE: ENFORCEMENT
ORDER NO. 1V-504 |
ADMINISTRATIVE ORDER BY CONSENT
(Pursuant to Rule 522.e. of the Rules and Regulations of the
Colorado Oil and Gas Conservation Commission, 2 CCR 404-1)
FINDINGS
1. Charles P. Dunning LLC (“Dunning”) (Operator No. 200077) is the operator of record for the Ikey #1 Well (“Well”) (API# 05-001-09750) in Adams County.
2. The Well was spud on October 30, 2012. Dunning failed to file timely reports as follows: 1) Form 42 – Notice of Spud; 2) Form 5 – Drilling Completion Report; 3) Form 42 – Notice of Intent to Conduct Hydraulic Fracturing Treatment; 4) chemical disclosure registry form; and 5) Form 7’s – Operator’s Monthly Report of Operations.
3. On February 2, 2015 Staff issued a Notice of Alleged Violation (“NOAV”) (No. 200422682) to Dunning for the alleged reporting violations at the Well. The NOAV cited violations of the following COGCC Rules of Practice and Procedure, 2 CCR 404-1 (“Rule” or “Rules”):
a. Rule 205A. (Hydraulic Fracturing Chemical Disclosure);
b. Rule 308A. (Form 5 – Drilling Completion Report);
c. Rule 309. (Form 7 – Operator’s Monthly Report of Operations);
d. Rule 316C.a. (Form 42 Filed Operations Notice – Notice of Intent to Conduct Hydraulic Fracturing); and
e. Rule 316C.b. (Form 42 Filed Operations Notice – Notice of Spud).
a. One, one-day violation of Rule 205A, because Dunning failed to make timely disclosure of hydraulic fracturing chemicals to the chemical disclosure registry;
b. One, one-day violation of Rule 308A. because Dunning failed to file a timely completed Drilling Completion Report;
c. One, one-day violation of Rule 309. because Dunning failed to file timely Operator’s Monthly Report of Operations;
d. One, one-day violation of Rule 316C.a. because Dunning failed to file a timely Notice of Intent to Conduct Hydraulic Fracturing Treatment; and
e. One, one-day violation of Rule 316C.b. because Dunning failed to file a timely Notice of Spud.
5. Subsequent to the issuance of the NOAV, Dunning has provided the remaining required documentation.
6. Pursuant to Rule 523 and the Commission’s Enforcement and Penalty Policy, Hearings staff calculated a penalty of $2,000 for these violations. The penalty calculation is based on the following:
· The violations occurred prior to the effective date of HB 14-1356;
· Daily penalty of $1,000 per day per violation;
· One day of violation for each violation;
· A statute of limitations infirmity for the Rule 205A, 316C.a., and 316C.b. violations;
· No aggravating or mitigating factors;
· No pattern of violation; and
· No gross negligence or knowing and willful misconduct.
7. On October 28, 2013, the Commission entered Order No. 1V-434 against Dunning for violations of Rule 319.b and Rule 326.b at the Shoemaker #7-19 Well (API #05-123-18970). Order 1V-434 imposed a $20,000 penalty, of which $10,000 was suspended pending compliance with both of the following conditions:
I. Dunning has no uncorrected violations of any Rule at any Dunning well or location for one year after approval of this Order.
II. Dunning will either plug, produce or perform a mechanical integrity test on the Wells before the expiration of five years after the mechanical integrity tests performed on the wells in 2013.
Condition I above was breached by the violations considered in this Administrative Order by Consent (AOC).
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 Dunning agrees to settle the NOAV and all violations referenced herein on the following terms and conditions:
a. Dunning has no uncorrected violations of any Rule at any Dunning well or location for one year after approval of this Order.
b. Dunning will either plug, produce or perform a mechanical integrity test on the Shoemaker #4-19 Well (API # 05-123-18989) and the Shoemaker #7-19 Well (API #05-123-18970) before the expiration of five years after the mechanical integrity tests performed on the wells in 2013.
If the two conditions above are satisfied, the suspended portion of the penalty will be vacated by the Director. If either of the two conditions is violated, the suspended portion of the penalty shall become due 30 days after notice by the Director to Dunning. No further action by the Commission will be necessary regarding the suspended portion of the penalty.
IV. For purposes of interpreting paragraph III above, Dunning will be in compliance with this condition if Dunning receives notice of failed inspection or violation and performs the required corrective action within the date specified by Commission staff for completion of the required corrective action.
V. Dunning agrees to the Findings of this AOC only for the purpose of expeditiously resolving the matter without a contested hearing
VI. Dunning will pay $3,500 within 30 days after this AOC is approved by the Commission. Dunning will pay the remaining $3,500 within 60 days after this AOC is approved by the Commission.
VII. The terms of the suspended penalty in this Order are in full substitution for the terms of the suspension of Order 1V-434.
RECOMMENDED this 1st day of May , 2015.
OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO
By
Peter J. Gowen, Enforcement Supervisor
AGREED TO AND ACCEPTED this ______day of May , 2015.
CHARLES P. DUNNING LLC
By
Signature of Authorized Company Representative
Print Signatory Name
Title
ORDER
HAVING CONSIDERED the Agreement between the Director and Dunning to resolve the NOAV, the COMMISSION ORDERS:
1. Dunning is found in violation of Rule 205A; Rule 308A; Rule 309; Rule 316C.a; and Rule 316C.b as described above.
2. Dunning is assessed a penalty of $2,000, for the violations cited in NOAV No. 200422682.
3. One half of the suspended penalty provided for in Order No. 1V-434 or $5,000 is revoked, and will become due as provided by this Order. The remaining $5,000 suspended penalty shall remain suspended provided that Dunning comply with both of the following conditions:
a. Dunning has no uncorrected violations of any Rule at any Dunning well or location for one year after approval of this Order.
b. Dunning will either plug, produce or perform a mechanical integrity test on the Shoemaker #4-19 Well (API # 05-123-18989) and the Shoemaker #7-19 Well (API #05-123-18970) before the expiration of five years after the mechanical integrity tests performed on the wells in 2013.
If the two conditions above are satisfied, the suspended portion of the penalty will be vacated by the Director. If either of the two conditions is violated, the suspended portion of the penalty shall become due 30 days after notice by the Director to Dunning. No further action by the Commission will be necessary regarding the suspended portion of the penalty.
4. For purposes of interpreting paragraph 3 above, Dunning will be in compliance with this condition if Dunning receives notice of failed inspection or violation and performs the required corrective action within the date specified by Commission staff for completion of the required corrective action.
5. Dunning will pay $3,500 within 30 days after this AOC is approved by the Commission. Dunning will pay the remaining $3,500 within 60 days after this AOC is approved by the Commission.
6. The terms of the suspended penalty in this Order are in full substitution for the terms of the suspension of Order 1V-434.
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. 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
Julie Murphy, Secretary