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 FRITZLER RESOURCES INC, WASHINGTON COUNTY, COLORADO

)

CAUSE NO. 1V

DOCKET NO. 150500148

TYPE: ENFORCEMENT

ORDER NO. 1V-506

ADMINISTRATIVE ORDER BY CONSENT

(Pursuant to Rule 522.e.(1) of the Rules and Regulations of the

Colorado Oil and Gas Conservation Commission, 2 CCR 404-1)

FINDINGS

1. Fritzler Resources, Inc. (“Fritzler”) (Operator No. 31257) is the operator of record of the Agnas Friedly 1 Well (API No. 05-121-11023) (“Well”) in Washington County. The Well was spud on May 15, 2013 and completed on June 10, 2013.

2. On December 12, 2013, COGCC Staff inspected the Well and observed that a well sign had not been installed, stormwater Best Management Practices (“BMPs”) had not been implemented, bare soils, and open drilling pits (Doc. No. 673700302).

3. On June 19, 2014 and July 11, 2014, COGCC Staff inspected the Well and observed that the conditions previously observed had not been corrected (Doc. No. 673704281 & 673704688). At the July 11, 2014 inspection, COGCC Staff also observed that weeds had moved onto the site due to the failure to revegetate the area.

4. On August 1, 2014, COGCC Staff issued Notice of Alleged Violation (“NOAV”) No. 200409794 for alleged violations of the following COGCC Rules of Practice and Procedure, 2 CCR 404-1 (“Rule” or “Rules”) at the Well:

a. Rule 210.b.(1) (Signs & Markers, Wells) for the failure to install a well sign at the wellhead from the time of initial drilling until final abandonment;

b. Rule 1002.f. (Stormwater Management) for the failure to implement and maintain BMPs to control stormwater runoff in a manner that minimizes erosion, transport of sediment offsite, and site degradation, which must be maintained until final reclamation is achieved;

c. Rule 1003.d. (Drilling Pit Closure) for the failure to close a drilling pit no later than three months after drilling and completion activities concluded; and

d. Rule 1003.e. (Restoration and Revegetation) for the failure to prevent invasion of weeds and reestablish a proper seedbed.

5. On October 8, 2014, COGCC Staff inspected the Well and observed that a well sign had been installed, the weeds identified in the July 11, 2014 inspection report had been controlled, the drilling pit had been closed, the soil stockpiles removed, and interim reclamation was completed and no deficiencies were noted (Doc. No. 673706751).

6. Following a factual investigation and legal review of the violations alleged in the NOAV referenced above, COGCC Staff now asserts Fritzler has committed the following violations:

NOAV No.	Well Name	Rule	Act	Class, Impact	Days of Violation	Daily Penalty	Total Penalty
200409794	Agnas Friedly 1	210.b.(1)	Old	NA	10	$500	$5,000
200409794	Agnas Friedly 1	1002.f.	Old	NA	10	$1,000	$10,000
200409794	Agnas Friedly 1	1003.d.	Old	NA	10	$1,000	$10,000
200409794	Agnas Friedly 1	1003.e.	Old	NA	10	$1,000	$10,000
Settlement Inducement							-$5,000
TOTAL							$30,000

7. Pursuant to Rule 523 and the Commission’s Enforcement and Penalty Policy, Hearings Staff calculated a penalty of $30,000 for these violations. The penalty calculation is based on the following:

a. Violations began before the effective date of HB 14-1356 (June 6, 2014);

b. Daily penalty of $1,000 per day;

c. Statutory limit of ten days of violation;

d. Settlement inducement;

e. No aggravating or mitigating factors; and

f. No pattern of violation or gross negligence or knowing & willful misconduct.

AGREEMENT

NOW, THEREFORE, based on the Findings and pursuant to Rule 522.e.(1) and the Commission’s Enforcement and Penalty Policy, the Director proposes and Fritzler agrees to fully resolve the NOAV and the violations alleged herein on the following terms and conditions:

Fritzler is found in violation of Rules 210.b.(1), 1002.f., 1003.d., and 1003.e., as described above.

Fritzler will be assessed a total penalty of $30,000.

III. Fritzler will pay $15,000 of $30,000 penalty within 30 days after this Administrative Order on Consent (“AOC”) is approved and mailed by the Commission. Fritzler will pay the remaining $15,000 of the $30,000 penalty within 60 days after the approved AOC is mailed by the Commission.

IV. Fritzler enters into this AOC without admission of liability. Fritzler agrees to the findings of this AOC only for the purpose of expeditiously resolving the matter without a contested hearing.

RECOMMENDED this 1^st day of May, 2015.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

Britta Beckstead, Assistant Attorney General

AGREED TO AND ACCEPTED this ______day of May, 2015.

FRITZLER RESOURCES INC

Signature of Authorized Company Representative

Print Signatory Name

Title

ORDER

HAVING CONSIDERED the Agreement between the Director and Fritzler to resolve the NOAV, the COMMISSION ORDERS:

1. Fritzler is found in violation of Rules 210.b.(1), 1002.f., 1003.d., and 1003.e., as described above.

2. Fritzler is assessed a penalty of $30,000.

3. Fritzler will pay $15,000 of $30,000 penalty within 30 days after the approved AOC is mailed by the Commission. Fritzler will pay the remaining $15,000 of the $30,000 penalty within 60 days after the approved AOC is mailed by the Commission. Failure to pay the penalty by the deadline is an independent violation that may be subject to additional penalties.

4. Entry of this Order constitutes final agency action for purposes of judicial review 30 days after 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.

5. The Commission expressly reserves its right after notice and hearing, to alter, amend, or repeal any and/or all of the above orders.

===================================================================ENTERED this _____ day of May, 2015 as of the ____ day of May, 2015.

OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

Julie Murphy, Secretary